On the Basis of the Following Data for Larson Co

question 129

Essay

On the basis of the following data for Larson Co. for the year ending December 31, 2011 and the preceding year ended December 31, 2010, prepare a statement of cash flows. Use the indirect method of reporting cash flows from operating activities. In addition to the balance sheet data, assume that:
Equipment costing $125,000 was purchased for cash.
Equipment costing $85,000 with accumulated depreciation of $65,000 was sold for $15,000.
The stock was issued for cash.
The only entries in the retained earnings account were net income of $51,000 and cash dividends declared of $13,000.

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Definitions:

Trade Restrictions

Measures implemented by governments to control or limit the flow of goods and services across borders, including tariffs, quotas, and import bans.

Domestic Supply

The total amount of goods and services that are produced within a country's borders and available for domestic consumption or export.

International Specialization

A method where countries or regions focus on producing goods and services they are most efficient at, to enhance global trade efficiency.

Economies Of Scale

The reduction in cost per unit of goods or services produced as the scale of output increases.