Prepare a statement of cash flows using the indirect method for the Windsor Corp for the year 2008.
Increase
(Decrease)
Cash 132,000
Marketable Securities (121,000)
Account Receivable 83,200
Allowance for Doubtful Accounts 13,300
Inventory 74,200
Prepaid Expense (17,500)
Investment In SAS, Inc (20,000)
Plant and Equipment 210,000
Accumulated Depreciation 130,000
Deferred Tax Assets (80,000)
Account Payable (80,700)
Accrued Liabilities (74,000
8% Bond Liability 80,000
Common Stock and Additional Paid in Capital 290,000
Retained Earnings (98,000)
Analysis of the Retained Earnings
Retained Earnings December 31, 2007 1,360,000
Add: Net Income 327,000
Deduct: Cash Dividends 185,000
Stock Dividends 240,000
Retained Earnings- Unappropriate, December 31, 2008 1,262,000
Additional Information:
A) On January 2 , 2008 marketable securities (available for -sale ) costing $121,000 were sold for $ 155,000
B) The company paid a cash dividend on February 1, 2008.
C) Account receivable of $16,200 and 19,400 were considered uncollectible and written-off in 2008 and 2007, respectively.
D) Major repairs of $33,000 to the equipment were debited to accumulated depreciation during the year. No assets were retired during 2008.
E) Windsor owns 20% of SAS, Inc. and accounts for their investment using the equity method. SAS paid no dividends during the year and had a net loss of $100,000.
F) During the year, employees exercise 2,000 stock options each having an exercise price of $ 25 a share. The DTA decrease reflects tax benefits the Company realized upon the exercise of the options.
G) At January 1, 2008, the cash balance was $166,000. Interest and tax expense were $30,000 and $75,000, respectively.