Comparative Financial Statements for Tomtric Company Follow Additional Data on Activities During 2019 Are as Follows:
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question 43

Essay

Comparative financial statements for Tomtric Company follow:

$\begin{array}{c} \text {Tomtric Company}\\ \text {Income Statement}\\ \text {For the year ended December 31, 2019}\\\begin{array}{|l|r|}\hline \text { Sales } & \$ 70,000 \\\hline \text { Cost of goods sold } & \underline{40,000} \\\hline \text { Gross margin } & 30,000 \\\hline \text { Depreciation expense } & 5,000 \\\hline \text { Other operating expenses } & \underline{ 15,000 }\\\hline \text { Operating income } & 10,000 \\\hline \text { Loss on sale of equipment } & \underline{4,000} \\\hline \text { Income before taxes } & 6,000 \\\hline \text { Income tax expense } & \underline{2,400} \\\hline \text { Net income } & \underline{\$ 3,600} \\\hline\end{array}\end{array}$

Additional data on activities during 2019 are as follows:
• During 2019, Tomtric Company sold used equipment for $3,000 that had cost $15,000 with accumulated depreciation of $8,000.
• New equipment was purchased for $12,000 cash.
• Cash dividends totaling $8,000 were paid.
• Long-term investments that had cost $18,000 when purchased were sold for $18,000.
• Common stock was issued for $10,000.
Prepare the operating activities section of the statement of cash flows using the indirect method.

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Definitions:

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