Statement of Cash Flows (Indirect Method)
Wolff Company's income statement and comparative balance sheets follow.
WOLFF COMPANY
Income Statement
For Year Ended December 31, 2019
Sales $635,000
Cost of goods sold $430,000 Wages expense 86,000 Insurance expense 8,000 Depreciation expense 17,000 Interest expense 9,000 Income tax expense 29,000 579,000
Net income $56,000
WOLFF COMPANY
Balance Sheet
Dec. 31, 2019 Dec. 31, 2018
Assets Cash $11,000 $5,000
Accounts receivable 41,000 32,000
Inventory 90,000 60,000
Prepaid insurance 5,000 7,000
PPE 250,000 195,000
Accumulated depreciation (68,000) (51,000)
Total assets $329,000 $248,000
Liabilities and Stockholders' Equity Accounts payable $7,000 $10,000
Wages payable 9,000 6,000
Income tax payable 7,000 8,000
Bonds payable 130,000 75,000
Common stock 90,000 90,000
Retained earnings 86,000 59,000
Total liabilities and equity $329,000 $248,000
Cash dividends of $29,000 were declared and paid during 2019. Also in 2019, PPE was purchased for cash, and bonds payable were issued for cash. Bond interest is paid semiannually on June 30 and December 31. Accounts payable relate to merchandise purchases.
a. Compute the change in cash that occurred during 2019.
Note: Do not use negative signs with your answers.
Cash, December 31, 2019 Answer
Less: Cash, December 31, 2018 Answer
Cash increase during 2019 Answer