Accounting
Pr. 23-128—Statement of cash flows (indirect method).
The net changes in the balance sheet accounts of Keating Corporation for the year 2011 are shown below. Account Debit Credit Cash $ 82,000 Short-term investments $121,000 Accounts receivable 83,200 Allowance for doubtful accounts 13,300 Inventory 74,200 Prepaid expenses 17,800 Investment in subsidiary (equity method) 20,000 Plant and equipment 210,000 Accumulated depreciation 130,000 Accounts payable 80,700 Accrued liabilities 21,500 Deferred tax liability 15,500 8% serial bonds 80,000 Common stock, $10 par 90,000 Additional paid-in capital 150,000 Retained earnings—Appropriation for bonded indebtedness 60,000 Retained earnings—Unappropriated 38,000 $643,600 $643,600 An analysis of the Retained Earnings—Unappropriated account follows: Retained earnings unappropriated, December 31, 2010 $1,300,000 Add: Net income 327,000 Transfer from appropriation for bonded indebtedness 60,000 Total $1,687,000 Deduct: Cash dividends $185,000 Stock dividend 240,000 425,000 Retained earnings unappropriated, December 31, 2011 $1,262,000
1. On January 2, 2011 short-term investments (classified as available-for-sale) costing $121,000 were sold for $155,000.
2. The company paid a cash dividend on February 1, 2011.
3. Accounts receivable of $16,200 and $19,400 were considered uncollectible and written off in 2011 and 2010, respectively.
4. Major repairs of $33,000 to the equipment were debited to the Accumulated Depreciation account during the year. No assets were retired during 2011.
5. The wholly owned subsidiary reported a net loss for the year of $20,000. The loss was recorded by the parent.
6. At January 1, 2011, the cash balance was $166,000.
Instructions
Prepare a statement of cash flows (indirect method) for the
The net changes in the balance sheet accounts of Keating Corporation for the year 2011 are shown below. Account Debit Credit Cash $ 82,000 Short-term investments $121,000 Accounts receivable 83,200 Allowance for doubtful accounts 13,300 Inventory 74,200 Prepaid expenses 17,800 Investment in subsidiary (equity method) 20,000 Plant and equipment 210,000 Accumulated depreciation 130,000 Accounts payable 80,700 Accrued liabilities 21,500 Deferred tax liability 15,500 8% serial bonds 80,000 Common stock, $10 par 90,000 Additional paid-in capital 150,000 Retained earnings—Appropriation for bonded indebtedness 60,000 Retained earnings—Unappropriated 38,000 $643,600 $643,600 An analysis of the Retained Earnings—Unappropriated account follows: Retained earnings unappropriated, December 31, 2010 $1,300,000 Add: Net income 327,000 Transfer from appropriation for bonded indebtedness 60,000 Total $1,687,000 Deduct: Cash dividends $185,000 Stock dividend 240,000 425,000 Retained earnings unappropriated, December 31, 2011 $1,262,000
1. On January 2, 2011 short-term investments (classified as available-for-sale) costing $121,000 were sold for $155,000.
2. The company paid a cash dividend on February 1, 2011.
3. Accounts receivable of $16,200 and $19,400 were considered uncollectible and written off in 2011 and 2010, respectively.
4. Major repairs of $33,000 to the equipment were debited to the Accumulated Depreciation account during the year. No assets were retired during 2011.
5. The wholly owned subsidiary reported a net loss for the year of $20,000. The loss was recorded by the parent.
6. At January 1, 2011, the cash balance was $166,000.
Instructions
Prepare a statement of cash flows (indirect method) for the