Metro Video Inc. is developing its annual financial statements at December 31 20

Wednesday July 13, 2022

Metro Video Inc. is developing its annual financial statements at December
31 2011. The statements are complete except for the statement of cash flows.
The completed comparative sheets and income statement are summarized:2011
2010Balance sheet at December 31Cash $68250 $65500Accounts
receivable 15250 22250Merchandise inventory 22250 18000Property and
equipment 209250 150000Less: Accumulated depreciation (59000)
(45750)Accounts payable $9000 $19000Wages payable 4000 1200Note
payable long-term 59500 71000Contributed capital 98500
65900Retained earnings 85000 52900$256000 $210000Income
statement for 2011Sales $19500Cost of goods sold 92000Depreciation
expense 13250Other expenses 43000Net income $46750Additional
Data:a. Bought equipment for cash $59250b. Paid $11500 on the
long-term note payable.c. Issued new shares of stock for $32600 cash.d.
Dividends of $14650 were declared and paid.e. Other expenses all relate to
wages. f. Accounts payable includes only inventory purchases made on
credit.Required:1. Prepare the statement of cash flows using the
indirect method for the year ended December 31 2011.2. Based on the cash
flow statement write a short paragraph explaining the major sources and uses of
cash by Metro Video during 2011.


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