The Murdock Corporation reported the following balance sheet data for 2021 and 2020: 2021 2020Cash$77,375 $22,955 Available-for-sale debt securities (not cash equivalents) 15,500 85,000 Accounts receivable 80,000 68,250 Inventory 165,000 145,000 Prepaid insurance 1,500 2,000 Land, buildings, and equipment 1,250,000 1,125,000 Accumulated depreciation (610,000) (572,000)Total assets$979,375 $876,205 Accounts payable$76,340 $148,670 Salaries payable 20,000 24,500 Notes payable (current) 25,000 75,000 Bonds payable 200,000 0 Common stock 300,000 300,000 Retained earnings 358,035 328,035 Total liabilities and shareholders' equity$979,375 $876,205 Additional information for 2021:(1) Sold available-for-sale debt securities costing $69,500 for $74,000.(2) Equipment costing $20,000 with a book value of $5,000 was sold for $6,000.(3) Issued 6% bonds payable at face value, $200,000.(4) Purchased new equipment for $145,000 cash.(5) Paid cash dividends of $20,000.(6) Net income was $50,000. Required:Prepare a statement of cash flows for 2021 in good form using the indirect method for cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign.)

The cash flow statement shows the cash inflow and cash outflow that includes the operating activity,…

Answered: The Murdock Corporation reported the…

Fundamentals Of Financial Management, Concise Edition (mindtap Course List)

10th Edition

ISBN:9781337902571

Author:Eugene F. Brigham, Joel F. Houston

Publisher:Eugene F. Brigham, Joel F. Houston

Chapter3: Financial Statements, Cash Flow, And Taxes

Section: Chapter Questions

Problem 19SP

See similar textbooks

Related questions

Question

The Murdock Corporation reported the following balance sheet data for 2021 and 2020:

	2021		2020
Cash	$	77,375		$	22,955
Available-for-sale debt securities (not cash equivalents)		15,500			85,000
Accounts receivable		80,000			68,250
Inventory		165,000			145,000
Prepaid insurance		1,500			2,000
Land, buildings, and equipment		1,250,000			1,125,000
Accumulated depreciation		(610,000	)		(572,000	)
Total assets	$	979,375		$	876,205
Accounts payable	$	76,340		$	148,670
Salaries payable		20,000			24,500
Notes payable (current)		25,000			75,000
Bonds payable		200,000			0
Common stock		300,000			300,000
Retained earnings		358,035			328,035
Total liabilities and shareholders' equity	$	979,375		$	876,205

Additional information for 2021:

(1) Sold available-for-sale debt securities costing $69,500 for $74,000.
(2) Equipment costing $20,000 with a book value of $5,000 was sold for $6,000.
(3) Issued 6% bonds payable at face value, $200,000.
(4) Purchased new equipment for $145,000 cash.
(5) Paid cash dividends of $20,000.
(6) Net income was $50,000.

Required:
Prepare a statement of cash flows for 2021 in good form using the indirect method for cash flows from operating activities. (Amounts to be deducted should be indicated with a minus sign.)

Expert Solution

Trending now

This is a popular solution!

Step by step

Solved in 2 steps with 2 images

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.