Financial Accounting: P16-4A The comparative balance sheet of Green Earth Lawn and Garden

Financial Accounting

P16-4A
The comparative balance sheet of Green Earth Lawn and Garden Inc. for December 31, 2008 and 2009, is as follows:
Assets Dec. 31, 2009 Dec. 31, 2008
Cash 137,900 142,300
Accounts receivable (net) 206,800 190,500
Inventories 290,500 284,100
Investments - 90,000
Land 200,000 -
Equipment 255,000 205,000
Accumulated depreciation (100,300) (76,700)
989,900 835,200

Liabilities and Stockholders Equity
Accounts payable (merchandise creditors) 224,900 201,400
Accrued expenses (operating expenses) 14,100 16,500
Dividends payable 21,000 19,000
Common stock, $1 par 10,000 8,000
Paid-in capital in excess of par-common stock 200,000 100,000
Retained earnings 519,900 490,300
989,900 835,200

The income statement for the year ended December 31, 2009, is as follows:
Sales 940,000
Cost of merchandise sold 489,300
Gross Profit 450,700
Operating expenses:
Depreciation expense 23,600
Other operating expense 278,900
Total operating expense 302,500
Operating income 148,200
Other income:
Gain on sales of investments 32,000
Income before income tax 180,200
Income tax expense 62,300
Net income 117,900

The following additional information was taken from the records:
1. Equipment and land were acquired for cash
2. There were no disposals of equipment during the year
3. The investment was sold for 122,000 cash.
4. The common stock was issued for cash
5. There were 88,300 debits to retained earnings for cash dividends declared.

Instructions:
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities.
Powered by