Sullivan Corpstatement of cash flows
dental doctor(SCF—Indirect Method) The following are Sullivan Corp.’s comparative balance sheet accounts at December 31, 2012 and 2011, with a column showing the increase (decrease) from 2011 to 2012.
COMPARATIVE BALANCE SHEETS | |||
2012 | 2011 | Increase | |
Cash | $ 815,000 | $ 700,000 | $115,000 |
Accounts receivable | 1,128,000 | 1,168,000 | (40,000) |
Inventory | 1,850,000 | 1,715,000 | 135,000 |
Property, plant, and equipment | 3,307,000 | 2,967,000 | 340,000 |
Accumulated depreciation | (1,165,000) | (1,040,000) | (125,000) |
Investment in Myers Co. | 310,000 | 275,000 | 35,000 |
Loan receivable | 250,000 | — | 250,000 |
Total assets | $6,495,000 | $5,785,000 | $710,000 |
Accounts payable | $1,015,000 | $ 955,000 | $ 60,000 |
Income taxes payable | 30,000 | 50,000 | (20,000) |
Dividends payable | 80,000 | 100,000 | (20,000) |
Capital lease obligation | 400,000 | — | 400,000 |
Common stock, $1 par | 500,000 | 500,000 | — |
Paid-in capital in excess of | 1,500,000 | 1,500,000 | — |
Retained earnings | 2,970,000 | 2,680,000 | 290,000 |
Total liabilities and stockholders’ equity | $6,495,000 | $5,785,000 | $710,000 |
Additional information:
1. On December 31, 2011, Sullivan acquired 25% of Myers Co.’s common stock for $275,000. On that date, the carrying value of Myers’s assets and liabilities, which approximated their fair values, was $1,100,000. Myers reported income of $140,000 for the year ended December 31, 2012. No dividend was paid on Myers’s common stock during the year.
2. During 2012, Sullivan loaned $300,000 to TLC Co., an unrelated company. TLC made the first semiannual principal repayment of $50,000, plus interest at 10%, on December 31, 2012.
3. On January 2, 2012, Sullivan sold equipment costing $60,000, with a carrying amount of $38,000, for $40,000 cash.
4. On December 31, 2012, Sullivan entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Sullivan made the first rental payment of $60,000 when due on January 2, 2013.
5. Net income for 2012 was $370,000.
6. Sullivan declared and paid cash dividends for 2012 and 2011 as shown on the next page.
2012 | 2011 | |
Declared | December 15, 2012 | December 15, 2011 |
Paid | February 28, 2013 | February 28, 2012 |
Amount | $80,000 | $100,000 |
Instructions
Prepare a statement of cash flows for Sullivan Corp. for the year ended December 31, 2012, using the indirect method.
12 years ago
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sullivan_corp_statement_of_cash_flows.docx
