Posted: July 12th, 2016

Prepare a statement of cash flows using the direct method?

Land 150 70
Buildings and equipment 910 600
Accumulated depreciation (200) (120)
Patents (less amortization) 105 130
Total long-term assets 965 680
Total assets $2,808 $1,890

Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable $420 $330
Income taxes payable 40 30
Notes payable 320 320
Total current liabilities 780 680
Long-term notes payable – due 2014 200 200
Total liabilities 980 880
Stockholders’ equity
Common stock outstanding 1,300 700
Retained earnings 528 310
Total stockholders’ equity 1,828 1,010
Total liabilities and stockholders’ equity $2,808 $1,890

Instructions:
Prepare a statement of cash flows using the direct method. Changes in accounts receivable and in accounts payable relate to sales and cost of sales. Do not prepare a reconciliation schedule.