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Sullivan Corpstatement of cash flows




(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;(Decrease);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;par?common stock;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.


Paper#79463 | Written in 18-Jul-2015

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