Use the Following Financial Statements and Additional Information to (1)

question 231

Essay

Use the following financial statements and additional information to (1) prepare a statement of cash flows for the year ended December 31, Year 2 using the indirect method, and (2) compute the company's cash flow on total assets ratio for Year 2.




Additional Information
a. A $20,000 note payable is retired at its carrying value in exchange for cash.
b. The only changes affecting retained earnings are net income and cash dividends paid.
c. New equipment is acquired for $120,000 cash.
d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700.
e. Prepaid expenses relate to Other Expenses on the income statement.
f. All purchases and sales of merchandise inventory are on credit.

---

Definitions:

Metacognitive Theory

A theory suggesting that people with generalized anxiety disorder implicitly hold both positive and negative beliefs about worrying.

Intolerance Of Uncertainty Theory

An explanation for generalized anxiety disorder that states that certain individuals cannot tolerate the knowledge that negative events may occur, even if the possibility of occurrence is very small.

Unconditional Positive Regard

A concept in client-centered therapy proposing unconditional acceptance and support of a person regardless of what they say or do.

Rogers's Client-Centered Theory

A psychological approach developed by Carl Rogers that emphasizes an individual's self-worth and the importance of unconditional positive regard from therapists.