P11-45
Subject:AccountingPrice: Bought3
P11-45. Statement of Cash Flows (Indirect Method).
Artic Company's income statement and comparative balance sheet follow.
ARTIC COMPANY
Income Statement
For Year Ended December 31, 2019.
Sales.......................................................................... $728,000
Cost of goods sold $534,000
Wages expense 190,000
Advertising expense 31,000
Depreciation expense 22,000
Interest expense 18,000
Gain on sale of land (25,000) 770,000
Net loss $ (42,000)
ARTIC COMPANY
Balance Sheet
December 31, 2019 December 31, 2018
Assets
Cash............................................. 49,000 28,000
Accounts receivable ............. 42,000 50,000
Inventory .................................... 107,000 113,000
Prepaid advertising.................... 10,000 13,000
Property, plant, equipment....... 360,000 222,000
Accumulated depreciation......... (78,000) (56,000)
Total assts..................................... 490,000 370,000
Liabilities and Stockholders' Equity.
Accounts payable............................. 17,000 31,000
Interest payable............................... 6,000 -
Bonds payable.................................. 200,000 -
Common stock................................ 245,000 245,000
Retained earnings.......................... 52,000 94,000
Treasury Sock.................................. (30,000) -
Total liabilities and equity............. 490,000 370,000
During 2019, Artic sold land for $70,000 cash that had originally cost $45,000. Artic also purchased equipment for cash, acquired treasury stock for cash, and issued bonds payable for cash in 2019. Accounts payable relate to merchandise purchases.
Required.
a. Compute the change in cash that occurred during 2019
b. Show 2019 statement of cash flows using the indirect method.
