The following are comparative balance sheets and an income statement for Wentworth Company.
Wentworth Company
Balance Sheets
As of December 31
Assets 2013 2012
Cash $21,500 $120,000
Accounts receivable 195,000 105,000
Inventory 180,000 225,000
Long-term investments 0 60,000
_______ _________
Totals $396,500 $510,000
Liabilities and shareholders’ equity
Accounts payable $75,000 $120,000
Operating expenses payable 24,000 15,000
Bonds payable 70,000 100,000
Common stock 125,000 125,000
Retained earnings 102,500 150,000
________ _________
Totals $396,500 $510,000
Wentworth Company
Income Statement
For the Year Ended December 31, 2013
Sales $560,000
Cost of goods sold:
Beginning Inventory $225,000
Purchases 30,000
________
Goods Available for Sale 555,000
Less: ending inventory 180,000
_________
Cost of goods sold 375,000
________
Gross Profit 185,000
Operating expenses 180,000
_________
Income from Operations 5,000
Other expenses:
Loss on sale of long-term investment (7,500)
_______
Net loss $ (2,500)
Cash dividends of $45,000 were paid in 2013.
Required:
Prepare a statement of cash flows for 2013 using the direct method.
