Kars also provided the following information: The company sold equipment that ha

Question

Kars also provided the following information:

The company sold equipment that had an original cost of $24 million and accumulated depreciation of $13 million. The cash proceeds from the sale were $13 million. The gain on the sale was $2 million.

Using the indirect method, prepare a statement of cash flows for the year. (Enter your answers in millions not in dollars . Amounts to be deducted and negative amounts should be indicated with a minus sign.)

Explanation / Answer

Pillsberry Company Balance Sheet Year 2 Year 1 Assets Cash $ 47,400 $ 88,500 Accounts receivable 279,000 122,000 Inventory 318,000 273,000 Prepaid expenses 8,500 17,000 Total current assets 652,900 500,500 Plant and equipment 631,000 502,000 Accumulated depreciation 166,300 130,900 Net plant and equipment 464,700 371,100 Loan to Puffington Company 44,000 ? Total assets $ 1,161,600 $ 871,600 Liabilities and Stockholders' equity Accounts payable $ 318,000 $ 253,000 Accrued liabilities 47,000 54,000 Income taxes payable 85,500 81,600 Total current liabilities 450,500 388,600 Bonds payable 209,000 108,000 Total liabilities 659,500 496,600 Common stock 332,000 286,000 Retained earnings 170,100 89,000 Total stockholders' equity 502,100 375,000 Total liabilities and stockholders' equity $ 1,161,600 $ 871,600 Equipment that had cost $31,300 and on which there was accumulated depreciation of $11,100 was sold during Year 2 for $26,200. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock. Prepare a statement of cash flows for Year 2. (Amounts to be deducted and negative amounts should be indicated with a minus sign.)

Related Questions

Navigate

• Browse (All)
• Browse K
• Subjects

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.