pr 22 76 preparation of statement of cash flows indirect method the net changes in t 4314457

pr 22 76 preparation of statement of cash flows indirect method the net changes in t 4314457

Pr. 22-76 Preparation of statement of cash flows (indirect method)

The net changes in the statement of financial position accounts of Brown Derby Corp. for calendar 2017 are shown below.Brown Derby adheres to ASPE.

Account   Debit   Credit

Cash………………………………………….$  92,000

FV-NI investments…………………………………$121,000

Accounts receivable……………………………….73,200

Allowance for doubtful accounts……………………….13,300

Inventory……………………………………….74,200

Prepaid expenses…………………………………22,800

Long-term investment (100% owned subsidiary)……………20,000

Plant and equipment……………………………….235,000

Accumulated depreciation……………………………155,000

Accounts payable…………………………………80,700

Accrued liabilities………………………………….16,500

Deferred tax liability………………………………..15,500

Long-term bonds………………………………….80,000

Common shares………………………………….240,000

Retained earnings…………………………………    98,000_______

$668,600$668,600

Other information regarding the corporation’s 2017 year:

An analysis of the Retained Earnings account shows:

Retained earnings, December 31, 2016………………….$1,300,000

Add: Net income………………………………….287,000

Subtotal……………………………………1,587,000

Deduct:Cash dividend…………………………….$145,000

Stock dividend……………………………  240,000     385,000

Retained earnings, December 31, 2017………………….$1,202,000

1.On January 2, 2017, FV-NI investments costing $121,000 were sold for $150,000.

2.The company paid the cash dividend on February 1, 2017, and distributed the stock dividend on August 1, 2017.

3.Accounts receivable of $16,200 and $19,400 were considered uncollectible and written off in 2017 and 2016, respectively.

4.Major repairs of $25,000 to the equipment were debited to the Plant and Equipment account during the year.

5.The 100% owned subsidiary reported a net loss for the year of $20,000.

6.At January 1, 2017, the cash balance was $136,000.

7. Long-term bonds were sold at par.

Instructions

Prepare a statement of cash flows (indirect method) for calendar 2017.

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