accounting 459249

On the basis of the following data for Branch Co. for the year ended December 31, 2011 and the preceding year, prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities.

Assume that equipment costing $125,000 was purchased for cash and the land was sold for $15,000. The stock was issued for cash and the only entries in the retained earnings account were net income of $56,000 and cash dividends declared and paid of $18,000.

2010 2011

Cash 65,000 54,000

Accounts Receivable(net) 78,000 85,000

Inventories 106,500 90,000

Land – 20,000

Equipment 495,000 370,000

Accumulated depreciation (215,000) (158,000)

Accounts payable(merchandise creditor) 53,500 55,000

Common stock, $10 par 200,000 170,000

Paid in capital in excuse of par- common stock 62,000 60,000

retained earnings 214,000 176,000

Total 529,500 461,000