The Comparative Balance Sheet of Barry Company for Years 1

question 189

Essay

The comparative balance sheet of Barry Company for Years 1 and 2 ended December 31 appears below in condensed form:
a Net income, $75,800.
b Depreciation reported on income statement, $38,000.
c Fully depreciated equipment costing $60,000 was scrapped, no salvage, and equipment was purchased for $150,000.
d Bonds payable for $75,000 were retired by payment at their face amount.
e 2,500 shares of common stock were issued at $30 for cash.
f Cash dividends declared and paid, $40,000.
g Investments of $100,000 were sold for $125,000.
Prepare a statement of cash flows using the indirect method.

---

Definitions:

Paid-In-Capital Accounts

Accounts representing the funds contributed by shareholders over and above the nominal value of the shares; it's an equity item on the balance sheet.

Consolidating Journal Entry

A journal entry made in the process of combining the financial statements of several departments or subsidiaries into a single set of statements.

Wholly Owned Subsidiary

A company whose entire stock is held by another company, making it completely controlled by the parent company.

Loss Associate

A situation where a company incurs a loss through its investment in an associate or joint venture.