The comparative balance sheets for Naomi Corporation show the following information: 2021 2020 Cash $24,400 $20,700 Accounts receivable, net 43,300 20,300 Inventory 40,000 42,000 Investments 20,000 15,000 Building 160,000 100,000 Accumulated depreciation – building (27,700) (20,000) Equipment 61,500 50,000 Accumulated depreciation - equipment (10,000) (17,500) Total $311,500 $210,500 Accounts payable $17,000 $26,500 Salaries payable 21,000 17,000 Long-term notes payable 100,000 50,000 Common stock 110,000 90,000 Retained earnings 63,500 27,000 Total $311,500 $210,500 Additional data related to 2021 are as follows: $10,000 of the long-term note payable was paid by cash. Equipment that had cost $15,000 and had accumulated depreciation of 9,500 at time of disposal was sold for $4,000 in cash. Common stock was issued in exchange for $20,000 cash. Cash dividends were paid. Investments were purchased for $5,000 in cash. Cash of $26,500 was paid for the acquisition of equipment. A long-term note for $60,000 was issued for the acquisition of a building. Depreciation expense for the year is $9,700. Net Income for the year is $56,000. Required: Prepare a statement of cash flows, using the indirect method. Include all required disclosures.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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The comparative balance sheets for Naomi Corporation show the following information:

	2021	2020

Cash	$24,400	$20,700
Accounts receivable, net	43,300	20,300
Inventory	40,000	42,000
Investments	20,000	15,000
Building	160,000	100,000
Accumulated depreciation – building	(27,700)	(20,000)
Equipment	61,500	50,000
Accumulated depreciation - equipment	(10,000)	(17,500)
Total	$311,500	$210,500

Accounts payable	$17,000	$26,500
Salaries payable	21,000	17,000
Long-term notes payable	100,000	50,000
Common stock	110,000	90,000
Retained earnings	63,500	27,000
Total	$311,500	$210,500

Additional data related to 2021 are as follows:

$10,000 of the long-term note payable was paid by cash.
Equipment that had cost $15,000 and had accumulated depreciation of 9,500 at time of disposal was sold for $4,000 in cash.
Common stock was issued in exchange for $20,000 cash.
Cash dividends were paid.
Investments were purchased for $5,000 in cash.
Cash of $26,500 was paid for the acquisition of equipment.
A long-term note for $60,000 was issued for the acquisition of a building.
Depreciation expense for the year is $9,700.
Net Income for the year is $56,000.

Required:

Prepare a statement of cash flows, using the indirect method. Include all required disclosures.

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