P21-2 The comparative balance sheets for 2013 and 2012 and the statement of income for 2013 are given below for Wright Company.
P21-2 Statement of cash flows; direct method
P21-2 The comparative balance sheets for 2013 and 2012 and the statement of income for 2013 are given below for Wright Company. Additional information from Wright's accounting records is provided also.
Additional information from the accounting records:
a. Land that originally cost $10,000 was sold for $7,000.
b. The common stock of Microsoft Corporation was purchased for $25,000 as a short-term investment not classified as a cash equivalent.
c. New equipment was purchased for $150,000 cash.
d. A $30,000 note was paid at maturity on January 1.
e. On January 1, 2013, $60,000 of bonds were sold at face value.
f. Common stock ($50,000 par) was sold for $76,000.
g. Net income was $80,000 and cash dividends of $35,000 were paid to shareholders.
Required:
Prepare the statement of cash flows of Wright Company for the year ended December 31, 2013. Present cash flows from operating activities by the direct method. (You may omit the schedule to reconcile net income to cash flows from operating activities.)
SOLUTION PREVIEW (The Solution is done in EXCEL TEMPLATE)
Wright Company
Spreadsheet for the Statement of Cash Flows
Dec.31
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Changes
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Dec. 31
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2012
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Debits
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Credits
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2013
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Balance Sheet
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Assets:
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Cash
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30
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(15)
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12
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42
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Accounts receivable
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75
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(1)
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2
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73
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Short-term investment
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15
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(9)
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25
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40
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Inventory
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70
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(2)
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5
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75
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Land
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60
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(6)
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10
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50
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Buildings and equipment
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400
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(10)
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150
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550
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Less: Acc. depreciation
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(75)
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(4)
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40
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(115)
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575
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715
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File name: P21-2-The-comparitive.xls File type: application/vnd.ms-excel Price: $10
