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Homework answers / question archive / A comparative balance sheet for Rocker Company appears below:   ROCKER COMPANY Comparative Balance Sheet   Dec

A comparative balance sheet for Rocker Company appears below:   ROCKER COMPANY Comparative Balance Sheet   Dec

Finance

A comparative balance sheet for Rocker Company appears below:

 

ROCKER COMPANY
Comparative Balance Sheet
  Dec. 31, 2014 Dec. 31, 2013
Assets    
Cash $34,000 $11,000
Accounts receivable 18,000 13,000
Inventory 25,000 17,000
Prepaid expenses 6,000 9,000
Long-term investments 0 17,000
Equipment 60,000 33,000
Accumulated depreciation-equipment (20,000) (15,000)
Total assets $123,000 $85,000
Liabilities and Stockholder's Equity    
Accounts payable $17,000 $7,000
Bonds payable 36,000 45,000
Common stock 40,000 23,000
Retained earnings 30,000 10,000
Total liabilities and stockholders' equity $123,000 $85,000

 

Additional information:

1. Net income for the year ending December 31, 2014 was $35,000.

2. Cash dividends of $15,000 were declared and paid during the year.

3. Long-term investments that had a cost of $17,000 were sold for $14,000.

4. Sales for 2017 were $120,000.

Prepare a statement of cash flows for the year ended December 31, 2014 using indirect method.

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AmountNet Income$35,000Increase in Accounts Receivable(5,000)Increase in Inventory(8,000)Decrease in Prepaid Expense3,000Loss on Sale of Long-term Investments3,000Depreciation Expense5,000Increase in Accounts Payable7,000Decrease in Bonds Payable(9,000)Cash Flow from Operating Activities$31,000Decrease in Long-Term Investment17,000Increase in Equipment(27,000)Cash Flow From Investing Activities($10,000)Increase in Common Stock17,000Cash Dividends Paid(15,000)Cash Flow from Financing Activities$2,000Increase in Cash$23,000Add: Cash - Dec 31, 201311,000Cash - Dec 31, 2014$34,000

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