The comparative balance sheet for Proctor Precision appears below: PROCTOR PRECISION Comparative Balance Sheet Dec. 31, 2017Dec. 31, 2016 Assets Cash................................................$30,500$6,000 Accounts receivable...................................2,5004,000 Inventory............................................5,5003,500 Prepaid expenses.....................................1,0001,500 Building.............................................10,00010,000 Accumulated depreciation—building....................... (1,500) (1,000) Total assets..........................................$48,000$24,000 Liabilities and Stockholders' Equity Accounts payable.....................................$ 1,000$ 2,000 Long-term note payable................................6,5007,000 Common stock........................................19,0009,000 Retained earnings..................................... 21,500 6,000 Total liabilities and stockholders' equity....................$48,000$24,000 The income statement for the year is as follows: PROCTOR PRECISION Income Statement For the Year Ended December 31, 2017 Sales (all on credit)....................................$155,000 Expenses and losses Cost of goods sold.....................................$101,000 Operating expenses, exclusive of depreciation..............22,150 Depreciation expense..................................500 Interest expense......................................600 Loss on sale of land....................................1,250 Income taxes......................................... 4,500 Total expenses and loss................................ 130,000 Net income...........................................$ 25,000 Cash dividends were paid during the year. Land costing $10,000 was acquired by the issuance of common stock. The property was subsequently sold for $8,750 cash. Instructions Prepare a statement of cash flows for the year ended December 31, 2017 using the indirect method.
The comparative balance sheet for Proctor Precision appears below:
PROCTOR PRECISION
Comparative Balance Sheet
Dec. 31, 2017Dec. 31, 2016
Assets
Cash................................................$30,500$6,000
Accounts receivable...................................2,5004,000
Inventory............................................5,5003,500
Prepaid expenses.....................................1,0001,500
Building.............................................10,00010,000
Accumulated depreciation—building....................... (1,500) (1,000)
Total assets..........................................$48,000$24,000
Liabilities and Stockholders' Equity
Accounts payable.....................................$ 1,000$ 2,000
Long-term note payable................................6,5007,000
Common stock........................................19,0009,000
Total liabilities and stockholders' equity....................$48,000$24,000
The income statement for the year is as follows:
PROCTOR PRECISION
Income Statement
For the Year Ended December 31, 2017
Sales (all on credit)....................................$155,000
Expenses and losses
Cost of goods sold.....................................$101,000
Operating expenses, exclusive of depreciation..............22,150
Depreciation expense..................................500
Interest expense......................................600
Loss on sale of land....................................1,250
Income taxes......................................... 4,500
Total expenses and loss................................ 130,000
Net income...........................................$ 25,000
Cash dividends were paid during the year. Land costing $10,000 was acquired by the issuance of common stock. The property was subsequently sold for $8,750 cash.
Instructions
Prepare a statement of
Trending now
This is a popular solution!
Step by step
Solved in 3 steps with 2 images
