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Question

The following information relates to Clover Building Supply, Inc. The company leases a building adjacent to its

land.


Assets 2019 2018

Cash $133,500 $156,000

A/R net 177,000 180,000

Merchandise inventory 525,000 360,000

Equipment 1,237,500 945,000

Accum. Depreciation-equipment (360,000) (315,000)

Land 225,000 45,000

Total Assets $1,938,000 $1,371,000


Liabilities and Stockholders Equity

A/P $ 131,250 $122,250

Accrued liabilities payable 6,750 11,250

Capital stock-common-$par 1,125,000 900,000

Paid-in capital in excess of par 450,000 225,000

Retained Earnings 225,000 112,500

Total Liabilities and stockholder equity $1,938,000 $1,371,000


  1. Net income was $292,500 for the year.  
  2. Fully depreciated equipment costing $45,000 was sold for $11,250 (a gain of $11,250), and equipment costing $337,500 was purchased for cash.
  3.  Depreciation expense for the year was $90,000.
  4.  Land was purchased for $180,000.
  5.  An additional 7,500 shares of common stock were issued for cash at $60 per share (total proceeds, $450,000).
  6. Cash dividends of $180,000 were declared and paid.


-The company paid interest of $18,000 and income taxes of $195,000.

I need help creating a statement of cash flows but it has to be done using the indirect method.

I am also not sure how to do/log in any necessary supplemental schedule(s).

Thank you for your help!

Top Answer

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Cash flow statement.jpg

Statement of Cash Flows Indirect Method
For the year ended 2019 Particulars AmountS
CASH FROM OPERATING ACTIVITIES _
Net Income Note 1 2,92,500
Add: Depreciation 90,000
Less: Gain on sale of...

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