a
Ex. 189
The financial statements of Meenan Company appear below:
MEENAN COMPANY
Comparative Statement of Financial Position
December 31
2014 2013
Assets
Property, plant, and equipment€ 50,000€ 78,000
Accumulated depreciation (20,000) (24,000)
Inventory30,00015,000
Accounts receivable21,00034,000
Cash 43,000 23,000
Total€124,000€126,000
Equity and Liabilities
Share capital-ordinary€ 41,000€ 24,000
Retained earnings 46,000 38,000
Bonds payable7,00033,000
Accounts payable 17,000 23,000
Income taxes payable 13,000 8,000
Total€124,000€126,000
MEENAN COMPANY
Income Statement
For the Year Ended December 31, 2014
Sales revenue€400,000
Cost of goods sold 280,000
Gross profit120,000
Operating expenses 56,000
Income from operations64,000
Interest expense 4,000
Income before income taxes60,000
Income tax expense 18,000
Net income€ 42,000
Ex. 189(Cont.)
The following additional data were provided:
1.Dividends declared and paid were €34,000.
2.During the year, equipment was sold for €15,000 cash. This equipment cost €28,000 originally and had a book value of €15,000 at the time of sale.
3.All depreciation expense is in the operating expenses.
4.All sales and purchases are on account.
5.Accounts payable pertain to merchandise suppliers.
6.All operating expenses except for depreciation were paid in cash.
Instructions
Prepare a statement of cash flows for Meenan Company using the direct method.