During 2019, the company sold for $17,000 cash old equipment that had cost $36,000 and had $19,000 accumulated depreciation. Also in 2019, new equipment worth $60,000 was acquired in exchange for $60,000 of bonds payable, and bonds payable of $120,000 were retired for cash at a loss. A $26,000 cash dividend was declared and paid in 2019. Any stock issuances were for cash. Statement of Cash Flows (Indirect Method) (a) Compute the change in cash that occurred in 2019. Dair Company's income statement and comparative bala Cash, December 31, 2019 $ 27,000 DAIR COMPANY Cash, December 31, 2018 , 18,000 Income Statement For Year Ended December 31, 2019 Cash increase during 2019 S 9.000 Sales $ 700,000 Cost of goods sold $440,000 Wages and other operating expenses 95,000 (b) Prepare a 2019 statement of cash flows using the indirect method. Depreciation expense 22,000 Use negative signs with answers to show a decrease in cash. Amortization expense 7,000 DAIR COMPANY Interest expense 10,000 STATEMENT OF CASH FLOWS Income tax expense 36,000 FOR YEAR ENDED DECEMBER 31, 2019 , Loss on bond retirement 5,000 615.000 Net Cash Flow from Operating Activities Net income 85.000 $ Net Income Add(Deduct) Items to Convert Net Income to Cash Basis Depreciation DAIR COMPANY Amortization expense X Balance Sheets Loss on Bond Retirement Dec. 31, 2019 Dec. 31, 2018 Accounts Receivable X Assets Inventory X Cash $ 27,000 $ 18,000 Prepaid Expenses Accounts receivable 53,000 48,000 Accounts Payable Inventory 103.000 109.000 Interest Payable X Prepaid expenses 12.000 10,000 Income Tax Payable Plant assets 360,000 336,000 Net Cash Provided by Operating Activities Accumulated depreciation (87.000) (84.000) Cash Flows from investing Activities Intangible assets 43.000 50,000 Sale of Equipment Total assets Cash 5511.000 5 487,000 Cash Flows from Financing Activities Liabilities and Stockholders' Equity Retirement of Bonds Payable X Accounts payable $ 32.000 $26.000 Issuance of Common Stock Interest payable 4,000 7,000 Payment of Dividends X Income tax payable 6.000 8.000 Net Cash Used by Financing Activities Bonds payable 60.000 120.000 Net Increase in Cash Common stock 252.000 228.000 Cash at Beginning of Year Retained earnings 157.000 98.000 Cash at End of Year 5 Total liabilities and equity $ 511,000 $ 487,000 x X X X X x (c) Prepare separate schedules showing (1) cash paid for interest and for income taxes and (2) noncash investing and financing transactions. (1) Supplemental Cash Flow Disclosures Cash Paid for interest Cash Paid for Income Taxes $ $ (2) Schedule of Noncash Investing and Financing Activities Issuance of Bonds Payable to acquire Equipment $
