Financial and Managerial Accounting: PR16-2A The comparative balance sheet of Portable Luggage

Financial and Managerial Accounting
PR16-2A
The comparative balance sheet of Portable Luggage Company at December 31, 2008 and 2007, is as follows:
Dec. 31, 2008 Dec. 31, 2007
Assets
Cash 175,900 143,200
Accounts receivable (net) 264,100 235,000
Inventories 352,300 405,800
Prepaid Expenses 12,500 10,000
Land 120,000 120,000
Buildings 680,000 450,000
Accumulated depreciation-building (185,000) (164,500)
Machinery and equipment 310,000 310,000
Accumulated deprecation machinery & equipment 85,000 76,000
Patents 42,500 48,000
1,687,300 1,481,500
Liabilities and Stockholders Equity
Accounts payable (merchandise creditors) 332,300 367,900
Dividends payable 13,000 10,000
Salaries payable 30,200 34,600
Mortgage not payable, due 2015 90,000 -
Bonds payable - 154,000
Common stock, $1 par 24,000 20,000
Paid-in capital in excess of par- common stock 200,000 50,000
Retained earnings 997,800 845,000
1,687,300 1,481,500

An examination of the income statement and the accounting records revealed the following additional information applicable to 2008:
a. Net income, 204,800
b. Depreciation expense reported on the income statement: buildings, 20,500; machinery and equipment, 9,000
c. Patent amortization reported on the income statement, 5,500
d. A building was constructed for $230,000
e. A mortgage note for 90,000 was issued for cash.
f. 4,000 shares of common stock were issued at 38.50 in exchange for the bonds payable
g. Cash dividends declared 52,000

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