Presented below are the financial statements of Rajesh Company. - 14020

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Presented below are the financial statements of Rajesh Company.

RAJESH COMPANY
Comparative Balance Sheets
December 31

Assets

 

2012

 

2011

Cash

 

$35,000

   

$20,000

 

Accounts receivable

 

33,000

   

14,000

 

Inventory

 

27,000

   

20,000

 

Equipment

 

60,000

   

78,000

 

Accumulated depreciation—equipment

 

(29,000

)

 

(24,000

)

   Total

 

$126,000

 

 

$108,000

 

             

Liabilities and Stockholders’ Equity

           

Accounts payable

 

$29,000

   

$ 15,000

 

Income taxes payable

 

7,000

   

8,000

 

Bonds payable

 

27,000

   

33,000

 

Common stock

 

18,000

   

14,000

 

Retained earnings

 

45,000

 

 

38,000

 

   Total

 

$126,000

 

 

$108,000

 

 

RAJESH COMPANY
Income Statement
For the Year Ended December 31, 2012

Sales revenue

 

$242,000

Cost of goods sold

 

175,000

Gross profit

 

67,000

Operating expenses

 

24,000

Income from operations

 

43,000

Interest expense

 

3,000

Income before income taxes

 

40,000

Income tax expense

 

8,000

Net income

 

$32,000


Additional data:

1.

 

Dividends declared and paid were $25,000.

2.

 

During the year equipment was sold for $8,500 cash. This equipment cost $18,000 originally and had a book value of $8,500 at the time of sale.

3.

 

All depreciation expense, $14,500, is in the operating expenses.

4.

 

All sales and purchases are on account.


(a) Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

 

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