ACC – Rajesh Company Problem

Presented below are the financial statements of Rajesh Company.

Rajesh CompanyComparative Balance SheetsDecember 31

Assets

2014

2013

Cash

$37,390

$19,470

Accounts receivable

32,220

19,490

Inventory

29,940

20,610

Equipment

59,580

77,930

Accumulated depreciation—equipment

(29,760)

(23,270)

Total

$129,740

$114,230

Liabilities and Stockholders’ Equity

Accounts payable

$28,930

$16,610

Income taxes payable

7,050

8,250

Bonds payable

27,410

32,660

Common stock

17,450

13,400

Retained earnings

48,900

43,310

Total

$129,740

$114,230

Rajesh CompanyIncome StatementFor the Year Ended December 31, 2014

Sales revenue

$242,840

Cost of goods sold

176,320

Gross profit

66,520

Operating expenses

23,240

Income from operations

43,280

Interest expense

2,900

Income before income taxes

40,380

Income tax expense

8,180

Net income

$32,200
Additional data:

1.

Depreciation expense is 15,060.

2.

Dividends declared and paid were $26,610.

3.

During the year equipment was sold for $9,780cash. This equipment cost $18,350 originally and had accumulated depreciation of $8,570 at the time of sale.(a) Prepare a statement of cash flows using the indirect method.