Sec. 02 Due Date: June 29 th , 2015 Due Hour: 6:00 p.m. Sec. 01 Due Date: June 30 th , 2015 Due Hour: 6:00 p.m. General Guidelines: 1. Organization and proper indication of answers will be taken into account in the grade. 2. No digital answers will be taken into account. 3. All calculations must be provided. TOTAL WORTH: 5 points I. On the basis of the following data for Larson Co. for the year ending December 31, 2011 and the preceding year ended December 31, 2010, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. In addition to the balance sheet data, assume that: Equipment costing $125,000 was purchased for cash. Equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000. The stock was issued for cash. The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000. Year Year 2011 2010 Cash $100,000 $ 78,000 Accounts receivable (net) 78,000 85,000 Inventories 101,500 90,000 Equipment 410,000 370,000 Accumulated depreciation (150,000) (158,000) $539,500 $465,000 Accounts payable (merchandise creditors) $ 58,500 $ 55,000 Cash dividends payable 5,000 4,000 Common stock, $10 par 200,000 170,000 Paid-in capital in excess of par-- common stock 62,000 60,000 Retained earnings 214,000 176,000 $539,500 $465,000
