Reference no: EM131802407
Co. wants you to prepare its statement of cash flows.
Financial statements of Co. for 20X5 and 20X4 are provided below.
BALANCE SHEETS
12/31/X5 12/31/X4
Cash $306,000 $ 144,000
Accounts receivable $270,000 $162,000
Inventory $288,000 $360,000
Property, plant and equipment $456,000 $720,000
Less accumulated depreciation (240,000) 216,000 (228,000) 492,000
$1,080,000 $1,158,000
Accounts payable $ 132,000 $ 72,000
Income taxes payable 264,000 294,000
Bonds payable 270,000 450,000
Common stock 162,000 162,000
Retained earnings 252,000 180,000
$1,080,000 $1,158,000
INCOME STATEMENT
For the Year Ended December 31, 20X5
Sales revenue $6,300,000
Cost of sales 5,364,000
Gross profit 936,000
Selling expenses $450,000
Administrative expenses 144,000 594,000
Income from operations 342,000
Interest expense 54,000
Income before taxes 288,000
Income taxes 72,000
Net income $ 216,000
The following additional data were provided:
1. Dividends for the year 20X5 were $144,000.
2. During the year, equipment was sold for $180,000. This equipment cost $264,000 originally and had a book value of $216,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.
3. All depreciation expense is in the selling expense category.
4. Prepare the Statement of Cash Flows for the period ending December 31, 20X5