Additional information: During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold
in 2008.
Instructions
Prepare a statement of cash flows using the indirect method.
Condensed financial data of Pat Metheny Company for 2008 and 2007
are presented below
PAT METHENY COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2008 AND 2007

2008 2007
Cash $1,800 $1,150
Receivables 1,750 1,300
Inventory 1,600 1,900
Plant assets 1,900 1,700
Accumulated depreciation (1,200) (1,170)
Long-term investments (Held-to-maturity) 1,300 1,420

$7,150 $6,300
Accounts payable $1,200 $ 900
Accrued liabilities 200 250
Bonds payable 1,400 1,550
Capital stock 1,900 1,700
Retained earnings 2,450 1,900

$7,150 $6,300
PAT METHENY COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2008
Sales $6,900
Cost of goods sold 4,700
Gross margin 2,200
Selling and administrative expense 930
Income from operations 1,270
Other revenues and gains
Gain on sale of investments 80
Income before tax 1,350
Income tax expense 540
Net income 810
Cash dividends 260
Income retained in business $ 550

Martha is the head of the accounts department in a small manufacturing company. the company follows the accrual-basis method of accounting. it recently purchased raw materials worth $5,000 from its vendors. however, the company paid only $3,000 to its vendors. it plans to pay the remaining amount after three months. considering this information, which entry should martha record in the company’s accounts? a. $5,000 as accounts receivable b. $3,000 as accounts payable c. $2,000 as accounts payable d. $2,000 as accounts receivable

Expert computers was started in 2018. the company experienced the following accounting events during its first year of operation: started business when it acquired $40,000 cash from the issue of common stock. purchased merchandise with a list price of $32,000 on account, terms 2/10, n/30. paid off one-half of the accounts payable balance within the discount period. sold merchandise on account for $28,000. credit terms were 1/20, n/30. the merchandise had cost expert computers $16,000. collected cash from the account receivable within the discount period. paid $2,100 cash for operating expenses. paid the balance due on accounts payable. the payment was not made within the discount period. required record the events in a horizontal statements model below. in the cash flows column, use the letters oa to designate operating activity, ia for investing activity, fa for financing activity, or nc for net change in cash. if the account is not affected by the event, leave the cell blank. the first event is recorded as an example. what is the amount of gross margin for the period? what is the net income for the period?

Bathlinks corporation has a debt to assets ratio of 73%. this tells the user of bathlinks’s financial statements that a. bathlinks is getting a 27% return on its assets. b. there is a risk that bathlinks cannot pay its debts as they come due. c. 73% of the assets are financed by the stockholders. d. based on this measure, the user should not invest in bathlinks.