Additional information related to 2021 are as follows: a. Equipment that had cost $11,100 and was 30% depreciated at time of disposal was sold for $2,500. b. $5,000 of the long-term note payable was paid by issuing common stock. c. Distributed cash dividends of $5,000 that was declared in 2020. d. On January 1, 2021, the building was completely destroyed by a flood. Insurance proceeds on the building were $33,200 (net of $4,000 taxes). e. Equity investments (ownership is less than 20% of total shares) were sold at $1,400 above their cost. No unrealized gains or losses were recorded in 2021. f. Cash and a long-term note for $16,000 were given for the acquisition of equipment. g. Interest of $2,000 and income taxes of $4,900 were paid in cash. Required: Use the indirect method to prepare a statement of cash flows for Sky Corporation.

Additional information related to 2021 are as follows: a. Equipment that had cost $11,100 and was 30% depreciated at time of disposal was sold for $2,500. b. $5,000 of the long-term note payable was paid by issuing common stock. c. Distributed cash dividends of $5,000 that was declared in 2020. d. On January 1, 2021, the building was completely destroyed by a flood. Insurance proceeds on the building were $33,200 (net of $4,000 taxes). e. Equity investments (ownership is less than 20% of total shares) were sold at $1,400 above their cost. No unrealized gains or losses were recorded in 2021. f. Cash and a long-term note for $16,000 were given for the acquisition of equipment. g. Interest of $2,000 and income taxes of $4,900 were paid in cash. Required: Use the indirect method to prepare a statement of cash flows for Sky Corporation.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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