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Q1) Create statement of cash flows (indirect method) by using balance sheet data Following are comparative balance sheets for Millco, Inc., at January 31 and February 28, 2009:

MILLCO, INC.
Balance Sheets
February 28 and January 31, 2009

 Assets 28-Feb 31-Jan
Cash .......................... $42,000 $37,000
Accounts receivable ............................. 64,000 53,000
Merchandise inventory ............................. 81,000 94,000
Total current assets ........................... $187,000 $184,000
Plant and equipment:
Production equipment ........................... 166,000 152,000
Less: Accumulated depreciation .......................... (24000) (21000)
Total assets ................................................... $329,000 $315,000
Liabilities
Accounts payable .......................... $37,000 $41,000
Short-term debt............................. 44,000 44,000
Other accrued liabilities ........................... 21,000 24,000
Total current liabilities ........................... $102,000 $109,000
Long-term debt ............................. 33,000 46,000
Total liabilities ............................. $135,000 $155,000
Owners\' Equity
Common stock, no par value, 40,000 shares authorized, 30,000 and 28,000
Shares issued, respectively ............................ $104,000 $96,000
Retained earnings:
Beginning balance ......................... $64,000 $43,000
Net income for month ............................. 36,000 29,000
Dividends .......................... (10000) (8000)
Ending balance ............................ $90,000 $64,000
Total owners\' equity ............................ $194,000 $160,000
Total liabilities and owners\' equity ........................... $329,000 $315,000

Create statement of cash flows which describes the change which occurred in cash during the month. You may suppose that change in each balance sheet amount is due to single event. Use space to the right of January 31 data to enter difference between February 28 and January 31 amounts of each balance sheet item; these are amounts that will be in your solution.

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  • Reference No.:- M922502

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