Statement of cash flows-indirect method
The comparative balance sheet of Beets Industries, Inc. at December 31, 2013 and 2012, is as follows:
|
Dec. 31, 2013
|
Dec. 31, 2012
|
|
Assets
|
|
|
|
Cash
|
$ 379,920
|
$ 309,360
|
|
Accounts receivable (net)
|
570,240
|
507,600
|
|
Inventories
|
761,040
|
876,480
|
|
Prepaid expenses
|
27,120
|
21,600
|
|
Land
|
259,200
|
259,200
|
|
Buildings
|
1,468,800
|
972,000
|
|
Accumulated depreciation-buildings
|
(399,600)
|
(355,320)
|
|
Machinery and equipment
|
669,600
|
669,600
|
|
Accumulated depreciation-machinery and equipment
|
(183,600)
|
(164,160)
|
|
Patents
|
91,680
|
103,680
|
|
$3,644,400
|
$3,200,040
|
|
Liabilities and Stockholders' Equity
|
|
|
|
Accounts payable (merchandise creditors)
|
$ 717,840
|
$ 794,640
|
|
Dividends payable
|
28,080
|
21,600
|
|
Salaries payable
|
67,680
|
74,640
|
|
Mortgage note payable, due 2017
|
192,000
|
0
|
|
Bonds payable
|
0
|
336,000
|
|
Common stock, $2 par
|
99,200
|
43,200
|
|
Paid-in capital in excess of par-common stock
|
388,000
|
108,000
|
|
Retained earnings
|
2,151,600
|
1,821,960
|
|
$3,644,400
|
$3,200,040
|
An examination of the income statement and the accounting records revealed the following additional information applicable to 2013:
a. Net income, $441,960.
b. Depreciation expense reported on the income statement: buildings, $44,280; machinery and equipment, $19,440.
c. Patent amortization reported on the income statement, $12,000.
d. A building was constructed for $496,800.
e. A mortgage note for $192,000 was issued for cash.
f. 28,000 shares of common stock were issued at $12 in exchange for the bonds payable.
g. Cash dividends declared, $112,320.
Instructions
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.