Following are selected balance sheet accounts of Chocolate Bakery at December 31, 2013 and 2012, and the increases or decreases in each account from 2012 to 2013. Also presented is selected income statement information for the year ended December 31, 2013, and additional information.
Increase
Selected balance sheet accounts 2013 2012 (Decrease)
Assets:
Accounts receivable $ 34,000 $ 24,000 $10,000
Property, plant, and equipment 277,000 247,000 30,000
Accumulated depreciation (178,000) (167,000) (11,000)
Liabilities and stockholders' equity:
Bonds payable 49,000 46,000 3,000
Dividends payable 8,000 5,000 3,000
Common stock, $1 par 22,000 19,000 3,000
Additional paid-in capital 9,000 3,000 6,000
Retained earnings 104,000 91,000 13,000
Selected income statement information for the year ended December 31, 2013
Sales revenue $155,000
Depreciation 33,000
Gain on sale of equipment 13,000
Net income 28,000
Additional information
• Accounts receivable relate to sales of merchandise.
• During 2013, equipment costing $40,000 was sold for cash.
• During 2013, $20,000 of bonds payable were issued in exchange for property, plant, and equipment. There was no amortization of bond discount or premium.
Required:
Part A:
Items 1 through 4 represent activities that will be reported in Chocolate Bakery's statement of cash flows for the year ended December 31, 2013. For each item, determine the amount that should be reported in Chocolate Bakery's 2013 statement of cash flows. Use positive numbers for inflows and negative numbers for outflows. Also indicate which section (Operating, Investing, or Financing) of the statement of cash flow each item would be reported in.
Amount Category
1. Payments for purchase of property, plant, and equipment. _______ _______
2. Proceeds from sale of equipment. _______ _______
3. Cash dividends paid. _______ _______
4. Redemption of bonds payable. _______ _______
Part B:
Create the statement of Cash flows for Chocolate Bakery for the year ended December 13, 2013. Use the indirect method.