Reference no: EM131977207
Problem
Sofie Company uses the indirect method to prepare the statement of cash flows. Please refer to the following income statement:
|
Sales revenue
|
$140,000
|
|
|
Interest revenue
|
5,000
|
|
|
Loss on sale of plant assets
|
(4,000)
|
|
|
Total revenues and (losses)
|
|
$141,000
|
|
Cost of goods sold
|
100,000
|
|
|
Salary expense
|
23,000
|
|
|
Depreciation expense
|
8,000
|
|
|
Other operating expenses
|
9,000
|
|
|
Interest expense
|
2,000
|
|
|
Income tax expense
|
5,000
|
|
|
Total expenses
|
|
$147,000
|
|
Net income/(loss)
|
|
$ (6,000)
|
Other information provided:
During the year, the company borrowed $34,000 on a new note payable.
Current assets other than cash decrease by $4,000.
During the year, the company issued $28,000 common stock
Current liabilities increase by $1,000
Equipment with a net asset value of $10,000 was sold for $14,000.
Equipment costing $52,000 was purchased for cash.
During the year, the company repaid $40,000 of long-term notes payable.
The company paid dividends of $10,000 during the year.
Requirement:
Using the indirect method, prepare the operating activities section of cash flows.
Using the indirect method, prepare the investing activities section of the statement of cash flows.
Using the indirect method, prepare the financing section of the statement of cash flows.