P12-11A The comparative balance sheets for Vanco Company as of December 31 are presented below.
VANCO COMPANY
Comparative Balance Sheets
December 31
Assets 2012 2011
Cash $ 68,000 $ 45,000
Accounts receivable 50,000 58,000
Inventory 151,450 142,000
Prepaid expenses 15,280 21,000
Land 145,000 130,000
Equipment 225,000 155,000
Accumulated depreciation—equipment (45,000) (35,000)
Buildings 200,000 200,000
Accumulated depreciation—buildings (60,000) (40,000)
Total $749,730 $676,000
Liabilities and Stockholders’ Equity
Accounts payable $ 44,730 $ 36,000
Bonds payable 300,000 300,000
Common stock, $1 par 200,000 160,000
Retained earnings 205,000 180,000
Total $749,730 $676,000
Additional information:
1. Operating expenses include depreciation expense of $42,000.
2. Land was sold for cash at book value.
3. Cash dividends of $12,000 were paid.
4. Net income for 2012 was $37,000.
5. Equipment was purchased for $92,000 cash. In addition, equipment costing $22,000 with a book value of $10,000 was sold for $8,000 cash.
6. 40,000 shares of $1 par value common stock were issued in exchange for land with a fair value of $40,000.
Instructions
Prepare a statement of cash flows for the year ended December 31, 2012, using the indirect method.
Check: Cash from operations $94,000
Click here for the solution: The comparative balance sheets for Vanco Company as of December 31 are presented below
