Solved by verified expert :ACCT122
– Spring 2014
Due
March 8, 2014 Project #2
Preparation
of a Statement of Cash Flows – Indirect Method
Using
the provided information for National Brands Corporation, answer the following
questions:
a.
What is the book value of the equipment sold?
b.
What is the book value of the building sold?
c.
Prepare a statement of stockholders’ equity
d.
Prepare a statement of cash flows using the indirect method.
Your
answer may be submitted using Excel or Word; please make sure it is in the
proper format.
Plant
assets:
?
Acquisitions for the year were $47,000 cash.
?
Depreciation expense – $4,100
Common
stock was issued for $88,000.
Equipment:
?
Acquisitions for the year were $20,000 by executing a note payable.
?
Sold equipment for $35,000 cash. Calculate the gain/loss (analyze the
t-account).
?
Depreciation expense – $4,000
Buildings:
?
Sold a building for $31,700 cash. Calculate the gain/loss (analyze the
t-account).
?
Depreciation expense – $6,000
Treasury
stock was sold for $45,000 cash.
Cash
dividends of $15,000 were paid.
Net income/ (loss) for the year is calculated
from the activity in Retained Earnings.
National
Brands Corporation
Comparative
Balance Sheet
December
31, 2013
December
31, 2013 December 31, 2012
Cash
$180,200
$15,000
Accounts
Receivable 15,000 28,600
Inventory
23,800 17,000
Prepaid
expenses 3,000 5,700
Equipment
16,000 36,400
Plant
assets 52,900 10,000
Building
84,000 114,500
$374,900 $227,200
Accounts
payable (merchandise) $37,400
$16,000
Salary
payable 5,500 4,000
Accrued
liabilities 15,000 19,300
Income
tax payable 3,800 3,000
Notes
payable 117,000
97,000
Common
stock 138,000
50,000
Treasury
stock 0 (45,000)
Retained
earnings
58,200 82,900
$374,900
$227,200
