Complete Question:
ODGERS INC.
Comparative Balance Sheets at December 31, 2013 and 2014
Assets 2014 2013 Changes
Cash $127,664 $76,472 + $51,192
Accounts receivable 138,724 60,040 + 78,684
Inventory 177,750 162,503 +15,247
Prepaid expenses 44,872 41,080 +3,792
Long-term investments 218,040 172,220 +45,820
Plant assets 450,300 383,150 +67,150
Accumulated depreciation (79,000) (82,160) -(3,160)
Total $1,078,350 $813,305
Liabilities and Stockholders' Equity:
Accounts payable $161,160 $106,334 +$54,826
Accrued expenses payable 26,070 33,180 -7,110
Bonds payable 173,800 230,680 -56,880
Common stock 347,600 276,500 +71,100
Retained earnings 369,720 166,611 +203,109
Total $1,078,350 $813,305
ODGERS INC.
Income STatement Data
For the Year Ended December 31, 2014
Sales revenue $613,767
Less:
Cost of goods sold $214,027
Operating expenses, excluding
depreciation 19,608
Depreciation expense 73,470
Income tax expense 43,102
Interest expense 7,473
Loss on disposal of plant assets 11,850 $369,530
Net income $244,237
Additional information:
1. New equipment costing $158,000 was purchased for cash during the year.
2. Old equipment having an original cost of $90,850 and accumulated depreciation of $76,630 was sold for $2,370 cash.
3. Bonds matured and were paid off at face value for cash.
4. A cash dividend of $41,128 was declared and paid during the year.
Prepare a statement of cash flows using the indirect method.
Answer:
Odgers Inc.
ODGERS INC.
Statement of Cash Flows
For the Year Ended December 31, 2014
Operating activities:
Net income $244,237
Loss on disposal of plant assets 11,850
Depreciation expense 73,470
Accrued expenses payable (7,110)
Inventory (15,247)
Accounts receivable (78,684)
Prepaid expenses (3,792)
Accounts payable 54,826
Net cash (operating activities) $279,550
Investing activities:
Purchase of equipment ($158,000)
Long-term investments (45,820)
Sale of equipment 2,370
Net cash (investing activities) ($201,450)
Financing activities:
Repayment of bonds ($56,880)
Cash dividend (41,128)
Common stock issue 71,100
Net cash (financing activities) ($26,908)
Net cash inflow $51,192
Step-by-step explanation:
a) Data and Calculations:
Net income $244,237
Loss on disposal of plant assets 11,850
Depreciation expense 73,470
Net cash by operating activities $329,550
1. Purchase of equipment $158,000
2. Sale of equipment $2,370
3. Repayment of bonds $56,880
4. Cash dividend $41,128
Note: The figures of additional information have been changed to agree with the complete question.