A comparative balance sheet for Beaver Company appears below: BEAVER COMPANY Com
ID: 2380181 • Letter: A
Question
A comparative balance sheet for Beaver Company appears below:BEAVER COMPANY Comparative Balance Sheet
Assets 12/31/12 12/31/11
Cash $33,000 $10,000
Accounts Recievable $18,000 $14,000
Inventory $25,000 $18,000
Prepaid Expenses $6,000 $9,000
Long-term Investoments 0 $18,000
Equipment $60,000 $32,000
Accumulated depreciation - equipment ($20,000) ($14,000)
Total Assets $122,000 $87,000
Liabilities & Stockholders' Equity
Accounts Payable $17,000 $7,000
Bonds Payable $37,000 $47,000
Common Stock $40,000 $23,000
Retained Earnings $28,000 $10,000
Total Liabilities & Stockholders' Equity $122,000 $87,000
Additional information 1.Net income for the year ending December 31, 2012 was $33,000. 2.Cash dividends of $15,000 were declared and paid during the year. 3. Long term investments that had a cost of $18,000 were sold for $14,000. 4. Sales for 2012 were $120,000.
Instructions Prepare a statement of cash flows for the year ended December 31, 2012, using the indirect method
A comparative balance sheet for Beaver Company appears below:
BEAVER COMPANY Comparative Balance Sheet
Assets 12/31/12 12/31/11
Cash $33,000 $10,000
Accounts Recievable $18,000 $14,000
Inventory $25,000 $18,000
Prepaid Expenses $6,000 $9,000
Long-term Investoments 0 $18,000
Equipment $60,000 $32,000
Accumulated depreciation - equipment ($20,000) ($14,000)
Total Assets $122,000 $87,000
Liabilities & Stockholders' Equity
Accounts Payable $17,000 $7,000
Bonds Payable $37,000 $47,000
Common Stock $40,000 $23,000
Retained Earnings $28,000 $10,000
Total Liabilities & Stockholders' Equity $122,000 $87,000
Additional information 1.Net income for the year ending December 31, 2012 was $33,000. 2.Cash dividends of $15,000 were declared and paid during the year. 3. Long term investments that had a cost of $18,000 were sold for $14,000. 4. Sales for 2012 were $120,000.
Instructions Prepare a statement of cash flows for the year ended December 31, 2012, using the indirect method
BEAVER COMPANY Comparative Balance Sheet
Assets 12/31/12 12/31/11
Additional information 1.Net income for the year ending December 31, 2012 was $33,000. 2.Cash dividends of $15,000 were declared and paid during the year. 3. Long term investments that had a cost of $18,000 were sold for $14,000. 4. Sales for 2012 were $120,000.
Instructions Prepare a statement of cash flows for the year ended December 31, 2012, using the indirect
Explanation / Answer
Indirect Method PARTICULARS AMOUNT AMOUNT Operating Activities Net Income 33000 Add : Depreciation for the year (20000 - 14000) 6000 Add: loss on sale of Investments $4,000 Changes in Assets and liabilities Less : Increase in A/c receivable ($4,000) Lesss : Increase in Inventory ($7,000) Add: Decrease in Prepaid Expenses $3,000 Add: Increase in Accounts payables $10,000 Cash from operating activities 45000 Investment Activities Sales of Long term Investment $14,000 Less :Purchase of Equipment (60000 - 320000) ($28,000) Cash from Investment Activities ($14,000) Finance Activities Common stock issue $17,000 Less :Redemption of Bonds(47000 - 37000) ($10,000) Less: Cash dividends paid ($15,000) Cash from Finance Activities ($8,000) Total cash from all the activities 23000 Add: Opening Cash Balance $10,000 Closing cash balance (Balance figure) $33,000
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