Prepare a statement of cash flows

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Problem - Preparation of a Statement of Cash Flows and a Balance Sheet

Chekov Corporation's balance sheet at the end of 2009 included the following items.

Current assets

$235,000


Current liabilities

$150,000

Land

30,000


Bonds payable

100,000

Building

120,000


Common stock

180,000

Equipment

90,000


Retained earnings

44,000

Accum. depr.-building

(30,000)


Total

$474,000

Accum. depr.-equipment

(11,000)




Patents

40,000




Total

$474,000




The following information is available for 2010.

1. Net income was $55,000.

2. Equipment (cost $20,000 and accumulated depreciation $8,000) was sold for $9,000.

3. Depreciation expense was $4,000 on the building and $9,000 on equipment.

4. Patent amortization was $2,500.

5. Current assets other than cash increased by $25,000. Current liabilities increased by $13,000.

6. An addition to the building was completed at a cost of $27,000.

7. A long-term investment in stock was purchased for $16,000.

8. Bonds payable of $50,000 were issued.

9. Cash dividends of $25,000 were declared and paid.

10. Treasury stock was purchased at a cost of $11,000.

Required -

(a) Prepare a statement of cash flows for 2010.

(b) Prepare a balance sheet at December 31, 2010.

Reference no: EM131765115

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