Question

GolfGear & More, Inc., is a regional and online golf equipment retailer. The company reported the following for the current year:

Purchased a long-term investment for cash, $19,200.

Paid cash dividend, $12,700.

Sold equipment for $9,500 cash (cost, $28,000, accumulated depreciation, $18,500).

Issued shares of no-par stock, 600 shares at $10 per share cash.

Net income was $23,700.

Depreciation expense was $3,700.

Its comparative balance sheet is presented below.

	Balances 12/31/Current Year			Balances 12/31/Prior Year
Cash		21,300			23,300
Accounts receivable		29,000			29,000
Merchandise inventory		79,200			71,500
Investments		19,200			0
Equipment		90,000			118,000
Accumulated depreciation		(17,900	)		(32,700	)
Total		220,800			209,100
Accounts payable	$	14,700		$	20,500
Wages payable		2,200			3,900
Income taxes payable		5,900			3,700
Notes payable		61,000			61,000
Common stock and additional paid-in capital		106,000			100,000
Retained earnings		31,000			20,000
Total	$	220,800		$	209,100

Required:

1. Complete a T-account worksheet.

2. Based on the T-account worksheet, prepare the statement of cash flows for the current year in proper format. (List cash outflows as negative amounts.)

Answer 1