Comparative balance sheets for Eddie Murphy Company are presented below.
| EDDIE MURPHY COMPANY | |||
| Comparative Balance Sheets | |||
| 31-Dec | |||
| Assets | 2008 | 2007 | |
| Cash | 63,000 | 22,000 | |
| Accounts receivable | 85,000 | 76,000 | |
| Inventory | 180,000 | 189,000 | |
| Land | 75,000 | 100,000 | |
| Equipment | 260,000 | 200,000 | |
| Accumulated depreciation - equip. | (66,000) | (42,000) | |
| Total | 597,000 | 545,000 | |
| Liabilities and Stockholders’ Equity | |||
| Accounts payable | 34,000 | 47,000 | |
| Bonds payable | 150,000 | 200,000 | |
| Common stock ($1 par) | 214,000 | 164,000 | |
| Retained earnings | 199,000 | 134,000 | |
| Total | 597,000 | 545,000 | |
Additional information:
1. Net income for 2008 was $125,000.
2. Cash dividends of $60,000 were declared and paid.
3. Bonds payable amounting to $50,000 were redeemed for cash $50,000.
4. Common stock was issued for $50,000 cash.
5. Depreciation expense was $24,000.
6. Sales for the year were $978,000.
Instructions
Prepare a worksheet for a statement of cash flows for 2008 using the indirect method. Enter the
reconciling items directly on the worksheet, using letters to cross-reference each entry
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