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Vernet Indirect method

Price: $2.50


Presented below are the comparative balance sheets for Vernet Company
at December 31.


Vernet Company
Comparative Balance Sheets
12/31/14
Assets   2,014  2,013
Cash   41,460  57,000
Accounts receivable   77,000  64,000
Inventory   170,000  140,000
Prepaid expenses   12,140  16,540
Land   140,000  150,000
Equipment   215,000  175,000
Accumulated depreciation - equipment   (70,000)  (42,000)
Buildings   250,000  250,000
Accumulated depreciation- buildings   (70,000)  (50,000)
 Total   765,600  760,540
 



Liabilities and Stockholders' Equity
Accounts payable  $58,000 $45,000
Bonds payable  265,000 265,000
Common stock, $1 par  275,000 250,000
Retained earnings  167,600 200,540

Additional information:
1. Operating expenses include depreciation expense $57,000 and charges from prepaid
expenses of $4,400.
2. Land was sold for cash at cost for $35,000
3. Cash dividends of $82,940 were paid.
4. Net income for 2014 was $50,000.
5. Equipment was purchased for $80,000 cash. In addition, equipment costing $40,000
with a book value of $31,000 was sold for $37,000 cash.
6. Issued 25,000 shares of $1 par value common stock in exchange for land with a fair
value of $25,000.

Instructions
Prepare a statement of cash flows for 2014 using the indirect method.

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