Fundamentals of Financial Accounting 4th Edition by Fred Phillips,Robert Libby,Patricia Libby

Exercise 82

(Supplement 12B) Preparing a Statement of Cash Flows, Indirect Method: T-Account Approach
Golf Universe is a regional and online golf equipment retailer. The company reported the following for the current year:
• Purchased a long-term investment for cash, $15,000.
• Paid cash dividend, $12,000.
• Sold equipment for $6,000 cash (cost, $21,000, accumulated depreciation, $15,000).
• Issued shares of no-par stock, 500 shares at $12 cash per share.
• Net income was $20,200.
• Depreciation expense was $3,000.
Its comparative balance sheet is presented below.

Required:
1. Following Supplement 12B, complete a T-account worksheet to be used to prepare the statement of cash flows for the current year.
2. Based on the T-account worksheet, prepare the statement of cash flows for the current year in proper format.