Wil Wheaton, Kirk Enterprises' Controller, Is Preparing the Financial Statements $\bullet$

question 50

Essay

Wil Wheaton, Kirk Enterprises' controller, is preparing the financial statements for 2021 as follows. He has gathered this additional information:
$\bullet$ On December 31, 2021, Kirk sold a piece of equipment with an original cost of $25,000 for $10,000 cash.The equipment had a book value of $13,000.
$\bullet$ On February 1, 2021, Kirk issued $60,000 of common stock to raise cash in anticipation of the purchase of a new building later in the year.
$\bullet$ On February 2, 2021, Kirk took out a ten-year $110,000 long-term loan to provide the remaining funds needed to purchase the building.
$\bullet$ On May 15, 2021, Kirk paid $162,000 for the new building.
$\bullet$ The company paid a cash dividend of $9,500.
Required:
Using the indirect method, prepare Kirk Enterprises' statement of cash flows for 2021.

---

Definitions:

Specific Performance

A legal remedy in contract disputes where the court orders the breaching party to fulfill the exact terms of the contract, rather than simply paying damages.

Quantum Meruit

A legal principle where a person can recover a reasonable value of services provided, even in absence of a contract.

Mandatory Injunction

A court order compelling a party to undertake a specific act, often issued to prevent irreversible harm.

Quantum Meruit

A legal principle that means "as much as he deserves," allowing a person to recover reasonable value of services provided when a contract for them is nonexistent or cannot be enforced.