The comparative balance sheets for Drake Company appear below:Drake Inc.Comparative Balance SheetsDecember 31Assets 2014 2013Cash 41000 35000Accounts Receivable 75000 53000Inventories 120000 132000Prepaid Expenses 19000 25000Investments 100000 75000Plant assets 325000 250000Accumulated Depreciation (65000) (60000)Total Assets 615000 510000Liabilities & EquityAccounts Payable 93000 75000Accrued Expenses 29000 24000Bonds Payable 120000 160000Common Stock 275000 170000Retained Earnings 98000 81000Total Liabilities & Equity 615000 510000Drake Inc.Income StatementFor the Year Ended December 31 2014Sales 450000Cost of Goods Sold 300000Gross Margin 150000Less:Operating Expenses 60000Depreciation Expense 17000Income Taxes 20000Interest Expense 18000Loss on sale of plant assets 3000 118000Net Income 32000Additional information1. New plant assets costing $100000 were purchased with cash.2. Investments were purchased with cash.3. Old plant assets costing $25000 and with a book value of $13000 were sold for $10000 cash.4. Bonds with a face value of $40000 were converted into $40000 par value of common stock.5. Common stock was issued for cash.6. A cash dividend of $15000 was declared and paid during the year.RequiredPrepare a statement of cash ows for the year using the indirect method.

Categories: Uncategorized


Leave a Reply

Your email address will not be published. Required fields are marked *