Statement of Cash Flows. Acme Manufacturing has provided the following financial statements:
Acme Manufacturing Comparative Balance Sheets For the years Ended December 31, 20X4 and 20X5
20X4 20X5
ASSETS
Cash $ 112,500 $ 350,000
Accounts receivable 350,000 281,250
Inventories 125,000 150,000
Plant and equipment 1,000,000 1,025,000*
Accumulated depreciation (500,000) (525,000)
Land 500,000 718,750
Total assets $1,587,500 $2,000,000
Beginning equipment $1,000,000
Purchases 250,000
Less sales (225,000)
Less sales (225,000)
LIABILITIES AND EQUITY
Accounts Payable $ 300,000 $ 237,500
Mortgage payable – 250,000
Common Stock 75,000 75,000
Contributed capital in excess of par 300,000 300,000
Retained earnings 912,500 1,137,500
Total liabilities and equity $1,587,500 $2,000,000
Income Statement For the years Ended December 31, 20X5
Revenues $1,200,000
Gain on sale of equipment 50,000
Less: Cost of goods sold (640,000)
Less: Depreciation expense (125,000)
Less: Interest expense (35,000)
Net income $ 450,000
Other information
(a) Equipment with a book value of $125,000 was sold for $175,000 (original cost was $225,000).
(b) Dividends of $225,000 were declared and paid. Prepare a statement of cash flows.