Dependable Tires Company Uses the Indirect Method to Prepare the Statement

question 8

Essay

Dependable Tires Company uses the indirect method to prepare the statement of cash flows. Refer to the following comparative balance sheet for Dependable Tires Company and complete the third column to show the increases or decreases.
$\begin{array}{c} \text {Dependable Tires Company }\\ \text {Comparative Balance Sheet}\\ \text { December 31, 2018 and 2017}\\\begin{array}{lllc}&&& \text { Increase/ } \\&2018 & 2017 & \text { (Decrease }\\\text { Cash } & \$ 39,600 & \$ 19,800 & \\\text { Accounts Receivable } & 26,400 & 38,500 & \\\text { Merchandise Inventory } & \underline{204,000} & \underline{126,500} & \\\text { Total Assets } & \underline{270,000} & \underline{184,800} & \end{array}\end{array}$

$$\begin{array} { l l l } \text { Accounts Payable } & 4,000 & 6,600 \\\text { Accrued Liabilities } & 2,400 & 1,100 \\\text { Long-term Notes Payable } & \underline { 100,000 } & \underline { 99,000 } \\\text { Total Liabilities } & \underline { 108,000 } & \underline { 106,700 }\end{array}$$ $$\begin{array} { l c c } \text { Common Stock } & 36,000 & 2,200 \\\text { Retained Earnings } & 135,600 & \text { 81,400 } \\\text { Treasury Stock } & \underline { ( 9,600 ) }&\underline { ( 5,500 )} \\\text { Total Stockholders' Equity } & \underline { 162,000 } & \underline { 78,100 }\end{array}$$ $\text { Total Liabilities and Stockholders' Equity }$ $\quad$ $270,000 $\quad$ $184,800

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