ACCT122
– Spring 2014

Due
March 8, 2014 Project #2

Preparation
of a Statement of Cash Flows – Indirect Method

Using
the provided information for National Brands Corporation, answer the following
questions:

a.
What is the book value of the equipment sold?

b.
What is the book value of the building sold?

c.
Prepare a statement of stockholders’ equity

d.
Prepare a statement of cash flows using the indirect method.

Your
answer may be submitted using Excel or Word; please make sure it is in the
proper format.

Plant
assets:

?
Acquisitions for the year were $47,000 cash.

?
Depreciation expense – $4,100

Common
stock was issued for $88,000.

Equipment:

?
Acquisitions for the year were $20,000 by executing a note payable.

?
Sold equipment for $35,000 cash. Calculate the gain/loss (analyze the
t-account).

?
Depreciation expense – $4,000

Buildings:

?
Sold a building for $31,700 cash. Calculate the gain/loss (analyze the
t-account).

?
Depreciation expense – $6,000

Treasury
stock was sold for $45,000 cash.

Cash
dividends of $15,000 were paid.

Net income/ (loss) for the year is calculated
from the activity in Retained Earnings.

National
Brands Corporation

Comparative
Balance Sheet

December
31, 2013

December
31, 2013 December 31, 2012

Cash
$180,200
$15,000

Accounts
Receivable 15,000 28,600

Inventory
23,800 17,000

Prepaid
expenses 3,000 5,700

Equipment
16,000 36,400

Plant
assets 52,900 10,000

Building
84,000 114,500

$374,900 $227,200

Accounts
payable (merchandise) $37,400
$16,000

Salary
payable 5,500 4,000

Accrued
liabilities 15,000 19,300

Income
tax payable 3,800 3,000

Notes
payable 117,000
97,000

Common
stock 138,000
50,000

Treasury
stock 0 (45,000)

Retained
earnings
58,200 82,900

$374,900
$227,200