P14-27A Preparing the statement of cash flows—indirect method with noncash
transactions [35-45 min]
The 2012 comparative balance sheet and income statement of Rolling Hills, Inc., follow:
Table on page 692 (horngren 9e)
Additionally, Rolling Hills purchased land of $23,600 by financing it 100% with
long-term notes payable during 2012. During the year, there were no sales of land or
equipment, no additional issuances of notes payable, no retirements of stock, and no
treasury stock transactions.
Requirements
1. Prepare the 2012 statement of cash flows, formatting operating activities by the
indirect method.
2. How will what you learned in this problem help you evaluate an investment?
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