additional office equipment of $5,570 was purchased. Thus, cash of $12,670 was used
for investing activities, as shown in Exhibit 8.Cash Flows Used for Financing Activities
The cash flows for financing activities can also be determined from Exhibit 15. For
Online Solutions, the cash flows used for financing activities is composed of two items.
First, dividends of $18,000 are reported on the retained earnings statement shown in236 Chapter 5 Accounting for Merchandise Operations
Online Solutions
Balance sheetsExhibit 15
Online Solutions’ Comparative Balance SheetsDecember 31, Changes
2010 2009 Increase (Decrease)
Assets
Current assets:
Cash $ 52,950 $ 41,500 $11,450
Accounts receivable 76,080 52,000 24,080
Merchandise inventory 62,150 59,700 2,450
Office supplies 480 600 (120)
Prepaid insurance 2,650 3,000 (350)
Total current assets $194,310 $156,800 $37,510
Property, plant, and equipment:
Land $ 20,000 $ 20,000 $ 0
Store equipment 27,100 20,000 7,100
Accumulated depreciation—store equipment (5,700) (2,600) (3,100)
Office equipment 15,570 10,000 5,570
Accumulated depreciation—office equipment (4,720) (2,230) (2,490)
Total property, plant, and equipment $ 52,250 $ 45,170 $ 7,080
Total assets $246,560 $201,970 $44,590Liabilities
Current liabilities:
Accounts payable $ 22,420 $ 14,270 $ 8,150
Notes payable (current portion) 5,000 5,000 0
Salaries payable 1,140 1,500 (360)
Unearned rent 1,800 2,400 (600)
Total current liabilities $ 30,360 $ 23,170 $ 7,190
Long-term liabilities:
Notes payable (final payment due 2020) 20,000 25,000 (5,000)
Total liabilities $ 50,360 $ 48,170 $ 2,190Stockholders’ Equity
Capital stock $ 25,000 $ 25,000 $ 0
Retained earnings 171,200 128,800 42,400
Total stockholders’ equity $196,200 $153,800 $42,400
Total liabilities and stockholders’ equity $246,560 $201,970 $44,590