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Ozark Corporation reported net income of $100,000 for 20X5. The income statement revealed sales of $1,000,000; gross profit of $520,000; selling and administrative costs of $340,000

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Ozark Corporation reported net income of $100,000 for 20X5. The income statement revealed sales of $1,000,000;

gross profit of $520,000; selling and administrative costs of $340,000; interest expense of $20,000; and income taxes of $60,000.

The selling and administrative expenses included $25,000 for depreciation. No equipment was sold during the year. Equipment purchases were made with cash. Prepaid insurance included in the balance sheet related to administrative costs. All accounts payable included in the balance sheet relate to inventory purchases. The change in retained earnings is attributable to net income and dividends. The increase in common stock and additional paid-in capital is due to issuing additional shares for cash.

Ozark Corporation reported net income of $100,000 for 20X5.  The income statement revealed sales of $1,000,000; gross profit of $520,000; selling and administrative costs of $340,000; interest expense of $20,000; and income taxes of $60,000. 

The selling and administrative expenses included $25,000 for depreciation.  No equipment was sold during the year. Equipment purchases were made with cash.  Prepaid insurance included in the balance sheet related to administrative costs.  All accounts payable included in the balance sheet relate to inventory purchases.  The change in retained earnings is attributable to net income and dividends.  The increase in common stock and additional paid-in capital is due to issuing additional shares for cash.

Using the indirect approach, prepare a statement of cash flows for Ozark for the year ending December 31, 20X5.  Comparative balance sheets for Ozark follow.
      
OZARK CORPORATION
Balance Sheet
December 31, 20X4 and 20X5
      
      
  Assets  20X5 20X4  
  Cash   $          458,700  $          471,450  
  Accounts receivable               199,250              171,500   
  Inventories               248,600              278,800  
  Prepaid insurance                 13,000                11,000  
  Land               250,000              250,000  
  Building and equipment            1,500,000           1,300,000  
  Less: Accumulated depreciation              (205,000)            (180,000) 
  Total assets   $       2,464,550  $       2,302,750  
      
  Liabilities     
  Accounts payable   $            85,700  $            93,400   
  Interest payable                 10,500                15,000  
  Income taxes payable                 22,000                 8,000  
  Stockholders’ equity     
  Common stock               710,000              700,000  
  Paid in capital in excess of par               990,000              900,000  
  Retained earnings               646,350              586,350  
  Total liabilities and equity   $       2,464,550  $       2,302,750  
      
      
 
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