The balance sheet for kinder company showed the following information. Additiona
ID: 2353499 • Letter: T
Question
The balance sheet for kinder company showed the following information. Additional information concerning transaction and events during 2013 are presented below. 2013 2012 Cash $40,900 $10,200 Account Receivable (net) $38,300 $20,300 Inventory $35,000 $42,000 Long Term, Investments $- $15,000 Property, Plant & Equipment $231,500 $150,000 Accumulated Depreciation $(37,700) $(25,000) $308,000 $212,500 Accounts Payable $17,000 $26,500 Accrued Liabilities $21,000 $17,000 Long Term Note Payable $70,000 $50,000 Common Stock $130,000 $90,000 Retained Earning $70,000 $29,000 $308,000 $212,500 Net income for the year 2013 66,000 Depreciation on plant assets for the year, 12,700 Sold the long term investments for 28,000 (Assuming gain or loss is ordinary) Paid Dividends 25,000 Purchased machinery costing 21,500, paid cash Purchased machinery and gave a 60,000 long term note payable Paid a 40,000 long term note payable by issuing common stock.Explanation / Answer
Statement of cash flows (indirect method)
Cash flows from operating activities
Net income
66,000
adjustments to net income
depreciation
12,700
Gan on sale of investments
-13,000
Increase in AR
-18,000
Decrease in inventory
7,000
Decrease in AP
-9,500
Increase in accured liabilities
4,000
net cash provided by operating activities
49,200
Cash flows from investing activities
Purchase of machinery
-21,500
Sale of long-term investments
28,000
net cash provided by investing activities
6,500
Cash flows from financing activities
payment of dividend
-25,000
net cash provided by financing activities
-25,000
net increase in cash
30,700
Cash balance, beginning
10,200
cash balance, ending
40,900
Statement of cash flows (indirect method)
Cash flows from operating activities
Net income
66,000
adjustments to net income
depreciation
12,700
Gan on sale of investments
-13,000
Increase in AR
-18,000
Decrease in inventory
7,000
Decrease in AP
-9,500
Increase in accured liabilities
4,000
net cash provided by operating activities
49,200
Cash flows from investing activities
Purchase of machinery
-21,500
Sale of long-term investments
28,000
net cash provided by investing activities
6,500
Cash flows from financing activities
payment of dividend
-25,000
net cash provided by financing activities
-25,000
net increase in cash
30,700
Cash balance, beginning
10,200
cash balance, ending
40,900
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