Chapter 5 Accounting for Merchandise Operations 219Exhibit 7
Balance Sheet
Online Solutions
Balance Sheet
December 31, 2010Online Solutions
Statement of Cash Flows
For the Year Ended December 31, 2010Assets
Current assets:
Cash $ 52,950
Accounts receivable 76,080
Merchandise inventory 62,150
Office supplies 480
Prepaid insurance 2,650
Total current assets $194,310
Property, plant, and equipment:
Land $ 20,000
Store equipment $27,100
Less accumulated depreciation 5,700 21,400
Office equipment $15,570
Less accumulated depreciation 4,720 10,850
Total property, plant, and equipment 52,250
Total assets $246,560
Liabilities
Current liabilities:
Accounts payable $ 22,420
Note payable (current portion) 5,000
Salaries payable 1,140
Unearned rent 1,800
Total current liabilities $ 30,360
Long-term liabilities:
Note payable (final payment due 2020) 20,000
Total liabilities $ 50,360
Stockholders’ Equity
Capital stock $ 25,000
Retained earnings 171,200
Total stockholders’ equity 196,200
Total liabilities and stockholders’ equity $246,560Cash flows from operating activities:
Net cash flows from operating activities $ 47,120
Cash flows from investing activities:
Purchase of store equipment $ (7,100)
Purchase of office equipment (5,570)
Net cash flows used in investing activities (12,670)
Cash flows from financing activities:
Payment of note payable $ (5,000)
Payment of dividends (18,000)
Net cash flows used in financing activities (23,000)
Net increase in cash $ 11,450
January 1, 2010, cash balance 41,500
December 31, 2010, cash balance $ 52,950Exhibit 8
Statement of
Cash Flows for
Merchandising
Business