Solution-Prepare the statement of cash flows of surmise

Prepare the statement of cash flows of surmise company

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Reference no: EM131695424

Question - The comparative balance sheets for 2013 and 2012 are given below for Surmise Company. Net income for 2013 was $86 million.

SURMISE COMPANY Comparative Balance Sheets December 31, 2013 and 2012 ($ in millions)
	2013	2012
Assets
Cash	$88	$38
Accounts receivable	93	113
Less: Allowance for uncollectible accounts	(28)	(5)
Prepaid expenses	23	19
Inventory	130	105
Long-term investment	153	110
Land	106	106
Buildings and equipment	416	285
Less: Accumulated depreciation	(146)	(114)
Patent	28	29
	$863	$686
Liabilities
Accounts payable	$26	$48
Accrued liabilities	(3)	23
Notes payable	54	0
Lease liability	131	0
Bonds payable	68	142
Shareholders' Equity
Common stock	72	50
Paid-in capital-excess of par	267	205
Retained earnings	248	218
	$863	$686

Required: Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2013. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for changes in some account balances. A spreadsheet or T-account analysis will be helpful.

Reference no: EM131695424

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Prepare the statement of cash flows of surmise company

Reference no: EM131695424

Reference no: EM131695424

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