Diamond Corp

question 88

Essay

Diamond Corp.has provided the following information for the year ended December 31,2018.
Additional information provided by the company includes the following:
Equipment costing $60,000 was purchased for cash.
Equipment with a net book value of $10,000 was sold for $16,000.
Depreciation expense of $16,000 was recorded during the year.
During 2018,the company repaid $43,000 of long-term notes payable.
During 2018,the company borrowed $34,000 on a new long-term note payable.
There were no stock retirements during the year.
There were no sales of treasury stock during the year.
All sales are on credit.
Prepare the 2018 statement of cash flows,using the indirect method.

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Definitions:

Chapter 12

A chapter of the Bankruptcy Code specifically designed to address the financial restructuring of family farmers and fishermen.

Farmers

Individuals or entities engaged in the act of agriculture, growing crops and/or raising animals.

Unsecured Debts

Debts that are not backed by an asset or collateral, increasing the risk for lenders if the borrower defaults.

Chapter 7

A chapter of the U.S. Bankruptcy Code that involves the liquidation of a debtor's assets to pay off creditors.