Prepare and explain Smith’s Statement of Cash Flows for 2013
Smith Corporation had the following comparative balance sheet information for 2012 and 2013: Account 2013 2012 Cash $ 60,000 $ 56,000 Accounts Receivable 96,000 100,000 Inventory 316,000 312,000 Prepaid Insurance 20,000 16,000 Property, Plant & Equipment 140,000 120,000 Accumulated Depreciation (28,000) (20,000) Total $ 604,000 $ 584,000 Accounts Payable $ 28,000 $ 36,000 Bonds Payable 180,000 240,000 Common Stock 280,000 240,000 Retained Earnings 116,000 68,000 Total $ 604,000 $ 584,000 The company reported net income for 2013 of $80,000. No property, plant & equipment was disposed of during the year. Smith paid $32,000 in cash dividends during 2013. Smith uses the indirect method to prepare the statement of cash flows. Required: Prepare and explain Smith's Statement of Cash Flows for 2013