Following are the income statement for 2018 and the comparative statement of financial position for the year ended
December 31 of that year for Benin Bakeries Inc.
· Capital assets that had cost $90,400 were sold for proceeds of $34,200.
· A stock dividend valued at $50,000 was declared and distributed in June 2018.
· Equipment valued at $80,000 was acquired for preferred shares during the year.
· Bonds with a face value of $400,000 were issued for $368,000 cash in January 2018. No bonds were redeemed during the year.
· The temporary investments were considered to be cash equivalents.
Prepare cash flow statement for Benin Bakeries Inc. for 2018 using the indirect method. Show interest and income taxes paid on the face of the statement.
Statement of Income
for the year ended December 3], 2018 Revenues and gains: Sales 5 1,520,000
Interest and dividends 61,000
Gain on sale of investments 14,000 5 1,595,000 Expenses and losses: Cost of goods sold 5 700,000
Selling expenses 80,400
Amortization expense 39,200
Interest expense 16,600
Loss on sale of equipment 4,200
Income tax expense 226,400 1,066,800 Net income 5 528,200