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Unformatted text preview: 5,000 Income tax expense 9,000 581,500 ______ _______ Net income $21,000 Additional information: 1. Plant assets were sold at a sales price of $62,500. 2. Additional equipment was purchased at a cost of $60,000. 3. Dividends of $8,500 were paid. 4. All sales and purchases were on account. 5. Bonds were redeemed at face value. 6. Additional shares of stock were issued for cash. Instructions Prepare a statement of cash flows for Ernest Banks Company for the year ended December 31, 2006, using the indirect method. P14-8A Data for Ernest Banks Company is presented in P14-7A. Further analysis reveals The following. 1. Accounts payable relates to merchandise creditors. 2. All operating expenses, except depreciation expense, were paid in cash. Instructions Prepare a statement of cash flows for Ernest Banks Company for the year ended December 31, 2006, using the direct method....
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