Question

Question 1     Statement of Cash Flows
				WINGS, INC.
				BALANCE SHEETS
				DECEMBER 31
						2024		2023
ASSETS
	Cash					$          293,400		$                   145,200
	Accounts receivable					287,400		99,000
	Inventories					337,500		308,550
	Prepaid expenses					55,200		18,000
	Investments					339,000		282,000
	Equipment					810,000		727,500
	Accumulated depreciation					(150,000)		(156,000)
	TOTAL ASSETS					$      1,972,500		$              1,424,250
LIABILITIES AND STOCKHOLDERS' EQUITY
	Accounts payable					$          306,000		$                   201,900
	Accrued expenses payable					49,500		51,000
	Bonds payable					255,000		330,000
	Common stock					660,000		525,000
	Retained earnings					702,000		316,350
	TOTAL LIABILITIES & STOCKHOLDERS' EQUITY					$      1,972,500		$              1,424,250
				WINGS, INC
				INCOME STATEMENT
				FOR THE YEAR ENDED DECEMBER 31, 2024
	Sales							$              1,178,340
	Cost of goods sold							406,380
	Gross profit							$                   771,960
	Operating Expenses
	Selling, General, and Administrative					37,230
	Depreciation					139,500		176,730
	Operating Income							595,230
	Other Income and Expense
	Interest expense							14,190
	Loss on sale of plant assets							22,500
	Profit Before Tax							558,540
	Income tax							21,840
	Net Income							$                   536,700
Additional information:
1	New equipment costing $255,000 were purchased for cash during 2024.
2	Old equipment having an original cost of $171,000, were sold for $ 4,500 cash in 2024.
3	Bonds matured during 2024 and were paid off at face value for cash on June 1, 2024.
4	A cash dividend of $151,050 was declared and paid during 2024.
Required:
Prepare a statement of cash flows using the indirect method.
Show all your workings especially the equipment account and the accumulated depreciation
account.

Answer 1