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Show all calculations for answers. 1. On the basis of the following data...

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Accounting

Show all calculations for answers.

1. On the basis of the following data for Larson Co. for the year ending December 31 Year 2, and the preceding year ended December 31 Year 1, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. In addition to the balance sheet data, assume that:

Equipment costing $125,000 was purchased for cash.

Equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000.

The stock was issued for cash.

The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000. (16-151)

Year 2

Year 1

Cash

$100,000

$ 78,000

Accounts receivable (net)

78,000

85,000

Inventories

101,500

90,000

Equipment

410,000

370,000

Accumulated depreciation

(150,000)

(158,000

$539,500

$465,000

Accounts payable (merchandise creditors)

$ 58,500

$ 55,000

Cash dividends payable

5,000

4,000

Common stock, $10 par

200,000

170,000

Paidin capital in excess of parcommon stock

62,000

60,000

Retained earnings

214,000

176,000

$539,500

$465,000

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