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Prepare a Statement of cash flows:

The comparative balance sheet for Short Company as of December 31,2010 and 2009, is shown below, followed by the condensed income statement. Other financial data for 2010 is also given.

Instructions:

Prepare a statement of cash flows for 2010. Additional information for 2010 follows.

a. Acquired land at a cost of $60,000; paid one half of the purchase price in cash and issued common stock for the balance.

b. Sold used equipment for $20,000 in cash. The original cost was $40,000; depreciation of $10,000 had been taken. The remaining change in the property, Plant, and Equipment account represents a purchase of equipment for cash. Total depreciation expense for the year was $9,000.

c. Issued bonds payable at par value for cash.

d. Sold bond investments costing $20,000 at no gain or loss during the year.

e. Paid $20,000 cash dividends on the common stock.

Analyze: By what percentage did Cash increase from January 1 to December 31?

Short Company
Comparative Balance Sheet
December 31, 2010 and 2009


Assets 2010 2009

Cash 116,875 53,250

Accounts Receivable (Net) 86,000 67,250

Merchandise Inventory 82,650 74,000

Prepaid Rent 5,500 4,500

Land 85,000 25,000

Property,Plant, and Equipment 189,000 219,000

Less: Accumulated Depreciation-PPE (20,900) (21,900)

Investment in TVA Bonds 30,000 50,000
____________________________
Total Assets 574,125 471,100
____________________________


Liabilities and Stockholders' Equity

Liabilities
___________

Accounts Payable 66,300 86,600

Income Taxes Payable 9,250 9,500

Bonds Payable 140,000 100,000
___________________________
Total Liabilities 215,550 196,100
___________________________


Stockholders' Equity
__________________

Common Stock 105,000 75,000

Retained Earnings 253,575 200,000
____________________________
Total Stockholders' Equity 358,575 275,000
____________________________
Total Liabilities and stockholders' Equity 574,125 471,100
____________________________



Short Company
Condensed Income Statement
Year Ended December 31, 2010


Revenues 809,000
___________ _________
Costs and Expenses
__________________

Cost of Goods Sold 475,750

Depreciation Expense 9,000

Selling and Administration Expenses 197,650

Interest Expense 18,500

Loss on Sale of Equipment 10,000

Income Taxes Expense 24,525
____________
Total Costs and Expenses 735,425
____________
Net Income After Income Taxes 73,575

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