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P12-11A The comparative balance sheets for Vanco Company as of December 31 are

Price: $3.99


P12-11A The comparative balance sheets for Vanco Company as of December 31 are
presented below.

VANCO COMPANY
Comparative Balance Sheets

December 31
Assets 2012 2011
Cash $ 68,000 $ 45,000
Accounts receivable 50,000 58,000
Inventory 151,450 142,000
Prepaid expenses 15,280 21,000
Land 145,000 130,000
Equipment 225,000 155,000
Accumulated depreciation—equipment (45,000) (35,000)
Buildings 200,000 200,000
Accumulated depreciation—buildings (60,000) (40,000)
Total $749,730 $676,000

Liabilities and Stockholders’ Equity
Accounts payable $ 44,730 $ 36,000
Bonds payable 300,000 300,000
Common stock, $1 par 200,000 160,000
Retained earnings 205,000 180,000
Total $749,730 $676,000

Additional information:

1. Operating expenses include depreciation expense of $42,000.

2. Land was sold for cash at book value.

3. Cash dividends of $12,000 were paid.

4. Net income for 2012 was $37,000.

5. Equipment was purchased for $92,000 cash. In addition, equipment costing $22,000
with a book value of $10,000 was sold for $8,000 cash.

6. 40,000 shares of $1 par value common stock were issued in exchange for land with
a fair value of $40,000.

Instructions

Prepare a statement of cash flows for the year ended December 31, 2012, using the indirect
method

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