Prepare statement of cash flows using the indirect method for Libby Inc. for the year 2016.
Libby Inc.
Income statement
For the year ended on December 31, 2016
Sales $100,000
Cost of Goods Sold $61,000
Depreciation 5,000
Loss on Sale of land 1,000
Supplies Expense 8,000
Salaries Expense 10,000
Income Tax Expense 3,000
Total Expense $88,000
Net income $12,000
Libby Inc.
Balance Sheet
December 31
2016 2015
Asset
Cash $44,000 $18,000
Accounts Receivable 27,000 29,000
Inventory 30,000 36,000
Land 50,000 65,000
Equipment 60,000 37,000
Less Accumulated Depreciation (35,000) (30,000)
Total Assets $176,000 $155,000
Accounts Payable $25,000 $22,000
Salaries Payable 800 1,000
Notes Payable, Long Term 38,000 48,000
Common Stock 80,000 60,000
Retained Earnings 32,200 24,000
Total Liab. and Stockholder Eq. $176,000 $155,000
Additional Information
1. Bought equipment for cash, $23,000.
2. Sold Land costing $15,000 only for $14,000 with loss on sale of land $1,000
3. Paid $10,000 on long term note payable.
4. Issue new shares of common stock for $20,000.
5. Declared and paid a $3,800 dividend in cash