solution

Refer to information provided in preceding P10.3 and complete in good form an SC Fusing the indirect method.

P10.3

You have the following comparative balance sheets for a restaurant for the years ending December 31, 0007, and December 31, 0008. Calculate the change in working capital and prepare the restaurant’s statement of sources and uses of working capital for the year ending December 31, 0008.

a. Net income for Year 0008 $7,000. Annual depreciation of $1,000 wasincluded as an expense to arrive at net income.

b. New equipment costing $4,000 was purchased.

c. Dividends of $6,000 were paid out.

d. New shares (50 at $10 each) were issued.

e. The long-term loan was increased by $2,500