E9-148. Prepare the statement of cash flows using the indirect method. (LO 2, 5)
Use the following information for LAW Office Products and Supplies Inc. to prepare a statement of cash flows for the year ended December 31, 2007, using the indirect method.
| LAW Office Products and Supplies Inc. Balance Sheet | ||
| 2007 | 2008 | |
| Assets | ||
| Cash | $ 55,000 | $ 23,500 |
| Accounts receivable | 78,000 | 54,000 |
| Inventories | 180,000 | 169,000 |
| Land | 135,000 | 105,000 |
| Equipment | 350,000 | 260,000 |
| Accumulated depreciation | (90000) | (60,000) |
| Total assets | $ 708,000 | $561,500 |
| Liabilities and Shareholder’s Equity | ||
| Accounts payable | $ 35,000 | $23,500 |
| Bonds payable | 185,000 | 215,000 |
| Common stock and additional | ||
| paid-in capital | 225,0OO | 175,000 |
| Retained earnings | 263,000 | 131,500 |
| Total liabilities and shareholder’s equity | $708,000 | $561,500 |
Additional information:
a. Net income for the fiscal year ended December 31, 2007, was $145,000
b. The company declared and paid cash dividends.
c. The company redeemed bonds payable amounting to $30,000 for cash of $30,000.
d. The company issued common stock for $50,000 cash.
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