Method of reporting cash flows from operating activities

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Reference no: EM13760345

On the basis of the following data for Teller Co. for 2006 and the preceding year ended December 31, 2005, prepare a statement of cash flows in excel. Use the indirect method of reporting cash flows from operating activities.

Additional Information

1) Assume that equipment costing $125,000 was purchased for cash and equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000;

2) The stock was issued for cash;

3) The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.

Balance Sheet:

 

Year

Year

 

2006

2005

Cash

$100,000

$ 78,000 

Accounts receivable (net)

  78,000

 85,000

Inventories

 101,500

 90,000

Equipment

 410,000

370,000

Accumulated depreciation

 (150,000)

(158,000)

 

$539,500

$465,000

 

========

========

 

 

 

Accounts payable (merchandise creditors)

$ 58,500

$ 55,000 

Cash dividends payable

   5,000

  4,000

Common stock, $10 par

 200,000

170,000

Paid-in capital in excess of par--common stock

  62,000

  60,000

Retained earnings

 214,000

 176,000

 

$539,500

$465,000

 

========

========

Reference no: EM13760345

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