Reference no: EM13516718
The comparative balance sheet of Gold Medal Sporting Goods Inc. for December 31, 2008 and 2007, is shown as follows:
|
|
Dec. 31, 2008
|
Dec. 31, 2007
|
|
Assets
|
|
|
|
Cash
|
$ 391,100
|
$ 366,200
|
|
Accounts receivable (net)
|
142,400
|
130,600
|
|
Inventories
|
401,100
|
385,700
|
|
Investments
|
0
|
150,000
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|
Land
|
205,000
|
0
|
|
Equipment
|
440,700
|
345,700
|
|
Accumulated depreciation-equipment
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(104,000)
|
(92,500)
|
|
|
$1,476,300
|
$1,285,700
|
|
Liabilities and Stockholders' Equity
|
|
|
|
Accounts payable (merchandise creditors)
|
$ 267,800
|
$ 253,100
|
|
Accrued expenses (operating expenses)
|
26,400
|
32,900
|
|
Dividends payable
|
15,000
|
12,000
|
|
Common stock, $10 par
|
80,000
|
60,000
|
|
Paid-in capital in excess of par-common stock
|
300,000
|
175,000
|
|
Retained earnings
|
787,100
|
752,700
|
|
|
$1,476,300
|
$1,285,700
|
The following additional information was taken from the records:
a. The investments were sold for $175,000 cash.
b. Equipment and land were acquired for cash.
c. There were no disposals of equipment during the year.
d. The common stock was issued for cash.
e. There was a $94,400 credit to Retained Earnings for net income.
f. There was a $60,000 debit to Retained Earnings for cash dividends declared.
Instructions
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.