Demonstration_Problem_for_Chapter_12

Demonstration_Problem_for_Chapter_12 - $60,000 $68,000...

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Demonstration Problem 12-1 Prepare the Statement of Cash Flows— Indirect Method Selected financial information for Hunt Company follows: Balance Sheets as of December 31 Assets 2003 2004 Cash $ 2,000 $ 1,000 Accounts Receivable 8,000 9,000 Merchandise Inventory 20,000 16,000 Equipment 27,000 30,000 Accumulated Depreciation (12,000) (17,000) Land 15,000 29,000 Total Assets $60,000 $68,000 Liabilities Accounts Payable (for Inventory) $ 6,000 $ 8,000 Salaries Payable 9,000 4,000 Notes Payable 20,000 14,000 Total Liabilities 35,000 26,000 Stockholders’ Equity Common Stock, $10 Par Value 18,000 25,000 Retained Earnings 7,000 17,000 Total Stockholders’ Equity 25,000 42,000 Total Liabilities and Stockholders’ Equity
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Unformatted text preview: $60,000 $68,000 Income Statement For the Year Ended December 31, 2004 Sales $98,000 Cost of Goods Sold 62,000 Gross Margin $36,000 Salaries Expense (14,000) Depreciation Expense (10,000) Operating Income $12,000 Gain on Sale of Equipment 3,000 Net Income $15,000 Other information 1. During 2004, Hunt sold equipment that cost $6,000 for $4,000. Accumulated depreciation at the time of sale was $5,000. 2. During 2004, Hunt paid cash dividends of $5,000 to the stockholders. Required a. Prepare the statement of cash flows for 2004 using the indirect method....
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