Problem-11: Statement of Cash Flows

The comparative balance sheets for Rothlisberger Company as of December 31 are presented below.

1. Operating expenses include depreciation expense of $42,000 and charges from prepaid expenses of $5,720
2. Land was sold for cash at book value
3. Cash dividends of $20,000 were paid.
4. Net income of 2020 was $42,000
5. Eqipment was purchased for $88,000 cash. In addition , equipment costing $22,000 with a book value of $10,000 was sold for $6,000 cash.
6. Bonds wer converted at face value by issuing 40,000 shares of $1 par value common stock

Instructions

Prepare a statement of ash flows for the year ended December 31, 2020, using the indirect method.

Solution