a comparative balance sheet for halpern corporation is presented below; halpern
ID: 2481787 • Letter: A
Question
a comparative balance sheet for halpern corporation is presented below;
halpern corporation
comperative balance sheet
assets
2013 2012
cash $36,000 $31,000
accounts receivable (net) 70,000 60,000
prepaid insurance 25,000 17,000
land 18,000 40,000
equipment 70,000 60,000
accumulated depretiation (20,000) (13,000)
total assets $199,000 $195,000
liabilities and stockholder's equity
accounts payable $11,000 $6,000
bonds payable 27,000 19,000
common stock 140,000 115,000
retained earnings 21,000 55,000
total liabilities and stockholders' equity $199,000 $195,000
additional information;
1. net loss for 2013 is $20,000
2. cash dividens of $14,000 were declared and paid in 2013
3. land was sold for cash at a loss of $40,000 this was the only land transation during the year
4. equipment with a cost of $15,000 and accumulated depreciation of $10,000 was sold for $5,000 cash
5. $22,000 of bonds were retired during the year at carrying (book) value
6. equipment was acquired for common stock. the fair value of the stock at the time of the exchange was $25,000
Instructions
Prepare a statement of cash flows for the year ended 2013, using the indirect method
Explanation / Answer
Cash flow statement - Indirect Method Cash flow from operating Income Net Loss -20000 Add Depriciation 17000 Increase in accounts payable 5000 22000 Less Increase in accounts receivable 10000 Increase in prepaid insurance 8000 18000 Net cash flow from operating activity -16000 Cash flow from investing activity Increase in long term liabilities Net bonds retiring 30000 Add : Sale of equipment 5000 5000 Net cash flow from investing activity 35000 Cash flow from financing activity Dividend paid -14000 Net cash flow from financing activity -14000 Cash flow 5000 opening balance of cash 31000 closing balance of cash 36000 Net movement of cash 5000
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