The following information is available for MergenthalerCorporation for the year ended December 31, 2014:
Collection of principal on long-term loan to a supplier $16,000 Acquisition of equipment for cash 10,000 Proceeds from the sale of long-term investment at bookvalue 22,000 Issuance of common stock for cash 20,000 Depreciation expense 25,000 Redemption of bonds payable at carrying (book) value 34,000 Payment of cash dividends 6,000 Net income 30,000 Purchase of land by issuing bonds payable 40,000
In addition, the following information is available from thecomparative balance sheet for Mergenthaler at the end of 2014 and2013:
2014 2013 Cash $148,000 $91,000 Accounts receivable (net) 25,000 15,000 Prepaid insurance 19,000 13,000 Total current assets $192,000 $119,000 Accounts payable $30,000 $19,000 Salaries and wages payable 6,000 7,000 Total current liabilities $36,000 $26,000
Prepare Mergenthaler's statement of cash flows for the year endedDecember 31, 2014, using the indirect method. (Showamounts that decrease cash flow with either a - sign e.g. -15,000or in parenthesis e.g. (15,000).)
The following information is available for MergenthalerCorporation for the year ended December 31, 2014:
| Collection of principal on long-term loan to a supplier | $16,000 | ||
| Acquisition of equipment for cash | 10,000 | ||
| Proceeds from the sale of long-term investment at bookvalue | 22,000 | ||
| Issuance of common stock for cash | 20,000 | ||
| Depreciation expense | 25,000 | ||
| Redemption of bonds payable at carrying (book) value | 34,000 | ||
| Payment of cash dividends | 6,000 | ||
| Net income | 30,000 | ||
| Purchase of land by issuing bonds payable | 40,000 |
In addition, the following information is available from thecomparative balance sheet for Mergenthaler at the end of 2014 and2013:
| 2014 | 2013 | |||
| Cash | $148,000 | $91,000 | ||
| Accounts receivable (net) | 25,000 | 15,000 | ||
| Prepaid insurance | 19,000 | 13,000 | ||
| Total current assets | $192,000 | $119,000 | ||
| Accounts payable | $30,000 | $19,000 | ||
| Salaries and wages payable | 6,000 | 7,000 | ||
| Total current liabilities | $36,000 | $26,000 |
Prepare Mergenthaler's statement of cash flows for the year endedDecember 31, 2014, using the indirect method. (Showamounts that decrease cash flow with either a - sign e.g. -15,000or in parenthesis e.g. (15,000).)
Related questions
Presented below are changes in the account balances of Al-OthmanCompany during the year, except for Retained Earnings. The only entries in Retained Earnings were for netincome and dividends. Al-Othman declared dividends of $8,250 andpaid dividends of $11,000 during the year. Calculate NetIncome.
| Account | Change during year |
| Cash | $81,000 |
| Accounts payable | 34,000 |
| Accounts receivable (net) | 30,000 |
| Accrued Expenses | 27,000 |
| Accumulated OCI | -19,000 |
| Additional paid-in capital | 16,000 |
| Bonds payable | -20,000 |
| Common stock | 72,000 |
| Held-to-Maturity Bonds | -15,000 |
| Inventory | 42,000 |
| Long Term Prepaids | 21,000 |
| Non controlling Interest | -2,000 |
| Plant Assets (net) | -25,000 |
| Unearned Revenues | -13,000 |
STATEMENT OF CASHFLOWS
A comparative balance sheet for the Last Corporation ispresented below:
Last Corporation | ||
Balance Sheet | ||
December 31, 2014 | ||
2014 | 2013 | |
Assets | ||
Cash | $53,140 | $33,000 |
Accounts Receivable | 19,000 | 22,000 |
Inventory | 20,000 | 12,000 |
Total Current Assets | $92,140 | $67,000 |
Land | $55,000 | $60,000 |
Equipment | 160,000 | 140,000 |
Less Accumulated Depreciation | (60,500) | (50,000) |
Total Non-current Assets | $154,500 | $150,000 |
Total Assets | $246,640 | $217,000 |
Liabilities | ||
Accounts Payable | $31,000 | $25,000 |
Current Portion of Bank Loan | 18,000 | 22,000 |
Total Current Liabilities | $49,000 | $47,000 |
Non-Current portion of Bank Loan | 70,000 | 65,000 |
Total Liabilities | $119,000 | $112,000 |
Shareholders' Equity | ||
Common Shares | $80,000 | $70,000 |
Retained Earnings | 47,640 | 35,000 |
Total Shareholders' Equity | $127,640 | $105,000 |
Total Liabilities and Shareholders' Equity | $246,640 | $217,000 |
| Additional information Net income for the year is $34,730. There was no purchase of land, or a gain/loss on sale ofland. There were no sales of equipment. Cash dividends were paid during the year. |
REQUIRED: | |||||||
Prepare the cash flow statement for December 31, 2014 using theindirect method. | |||||||
