Prepare a statement of cash flows using the indirect method

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Reference no: EM132818100

Question - A comparative statement of financial position for Marigold Industries Inc. follows:

MARIGOLD INDUSTRIES INC. Statement of Financial Position December 31, 2020

December 31 2020 2019

Assets

Cash $21,200 $34,200

Accounts receivable 124,000 56,000

Inventory 231,000 204,000

Land 77,000 112,000

Equipment 267,000 213,000

Accumulated depreciation-equipment (70,100) (42,400)

Total $650,100 $576,800

Liabilities and Shareholders' Equity

Accounts payable $52,500 $60,200

Bonds payable 175,200 228,200

Common shares 218,000 165,000

Retained earnings 204,400 123,400

Total $650,100 $576,800

Additional information:

1. Net income for the fiscal year ending December 31, 2020, was $145,000.

2. Cash dividends of $64,000 were declared and paid. Dividends paid are treated as financing activities.

3. Bonds payable amounting to $53,000 were retired through issuance of common shares.

4. Land was sold at a gain of $5,000.5.No equipment was sold during the year.

Required - Prepare a statement of cash flows using the indirect method.

Reference no: EM132818100

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