The comparative balance sheet of Dowling Company for December 31, 2008 and 2007, is as follows:


Question Description:

29.99

The comparative balance sheet of Dowling Company for December 31, 2008 and 2007, is as follows: 1 answer below » The comparative balance sheet of Dowling Company for December 31, 2008 and 2007, is as follows: View complete question » Assets 2008 2007 Cash $140,350 $95,900 Accounts receivable (net) 95,300 102,300 Inventories 165,200 157,900 Prepaid expenses 6,240 5,860 Investments (long-term) 35,700 84,700 Land 75,000 90,000 Buildings 375,000 260,000 Accumulated depreciation—buildings 71,300 58,300 Machinery and equipment 428,300 428,300 Accumulated The comparative balance sheet of Dowling Company for December 31, 2008 and 2007, is as follows: Assets 2008 2007 Cash $140,350 $95,900 Accounts receivable (net) 95,300 102,300 Inventories 165,200 157,900 Prepaid expenses 6,240 5,860 Investments (long-term) 35,700 84,700 Land 75,000 90,000 Buildings 375,000 260,000 Accumulated depreciation—buildings 71,300 58,300 Machinery and equipment 428,300 428,300 Accumulated depreciation—machinery and equipment 148,500 138,000 Patents 58,000 65,000 Total assets $1,159,290 $1,093,660 Liabilities and Stockholders’ Equity Accounts payable (merchandise creditors) $43,500 $46,700 Accrued expenses (operating expenses) 14,000 12,500 Income taxes payable 7,900 8,400 Dividends payable 14,000 10,000 Mortgage note payable, due 2019 40,000 0 Bonds payable 150,000 250,000 Common stock, $30 par 450,000 375,000 Excess of issue price over par—common stock 66,250 41,250 Retained earnings 373,640 349,810 Total liabilities and stockholders’ equity $1,159,290 $1,093,660 The income statement for Dowling Company is shown here: Sales 1,100,000 Cost of merchandise sold 710,000 Gross profit 390,000 Operating expenses: Depreciation expense 23,500 Patent amortization 7,000 Other operating expenses 196,000 Total operating expenses 226,500 Income from operations 163,500 Other income: Gain on sale of investments $11,000 Other expense: Interest expense $26,000 $15,000 Income before income tax 148,500 Income tax expense 50,000 Net income 98,500 An examination of the accounting records revealed the following additional information applicable to 2008: a. Land costing $15,000 was sold for $15,000. b. A mortgage note was issued for $40,000. c. A building costing $115,000 was constructed. d. 2,500 shares of common stock were issued at 40 in exchange for the bonds payable. e. Cash dividends declared were $74,670. Instructions 1. Prepare a statement of cash flows, using the indirect method of reporting cash flows from operating activities. 2. Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities. View less » Jul 18 2014 01:00 PM

Answer

29.99