Crane Company

Income Statement

For the Year Ended December 31, 2022

Sales revenue $ 145,200

Cost of goods sold 105,000

Gross profit 40,200

Selling expenses $10,800

Administrative expenses 3,600 14,400

Income from operations 25,800

Interest expense 1,800

Income before income taxes 24,000

Income tax expense 4,800

Net income $ 19,200

Additional dа ta:

1. Depreciation expense was $10,500.

2. Dividends declared and paid were $12,000.

3. During the year equipment was sold for $5,100 cash.

This equipment cost $10,800 originally and had accumulated depreciation of $5,700 at the time of sale.

Prepare a statement of cash flows using the indirect method.

statement of cash flows using the indirect method

Cash flow from Operating Activities

Cash Receipts from Customers $145,200

Cash Paid to Supplies and Employees ($108,900)

Net Cash from Operating Activities $36,300

Cash flow from Investing Activities

Proceeds from Sale of Equipment $5,100

Net Cash from Investing Activities $5,100

Cash flow from Financing Activities

Dividends Paid ($12,000)

Net Cash from Financing Activities ($12,000)

Movement during the period $29,400

Cash and Cash Equivalents at Beginning of the Period 0

Cash and Cash Equivalents at the End of the Period $29,400

Explanation:

Cash Receipts from Customers Calculation:

Sales revenue $ 145,200

Assuming Cash Sales

Cash Paid to Supplies and Employees Calculation:

Cost of goods sold $105,000

Add Selling Expenses $10,800

Add Administrative expenses $3,600

Less Depreciation ($10,500)

Cash Paid to Supplies and Employees $108,900