ACC 560 Week 9 Assignment
P13-7A Presented below are the financial statements of Weller Company.
WELLER COMPANY
Comparative Balance Sheets
December 31
Assets 2008 2007
Cash $ 35,000 $ 20,000
Accounts receivable 33,000 14,000
Merchandise inventory 27,000 20,000
Property, Plant and Equipment 60,000 78,000
Accumulated depreciation (29,000) (24,000)
Total $126,000 $108,000
Liabilities and Stockholders' Equity
Accounts payable $ 29,000 $ 15,000
Income taxes payable 7,000 8,000
Bonds payable 27,000 33,000
Common stock 18,000 14,000
Retained earnings 45,000 38,000
Total $126,000 $108,000
WELLER COMPANY
Income Statement
For the Year Ended December 31, 2008
Sales $242,000
Cost of goods sold 175,000
Gross profit 67,000
Selling expenses $18,000
Administrative expenses 6,000 24,000
Income from operations 43,000
Interest expense 3,000
Income before income taxes 40,000
Income tax expense 8,000
Net income $ 32,000
Additional data:
1. Dividends declared and paid were $25,000.
2. During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale.
3. All depreciation expense, $14,500, is in the selling expense category.
4. All sales and purchases are on account.
Instructions
Prepare a statement of cash flows using the indirect method.
Click here for the solution: Presented below are the financial statements of Weller Company
