Exercise 23-14 Brecker Inc., a greeting card company, had the following statemen
ID: 2391700 • Letter: E
Question
Exercise 23-14
Brecker Inc., a greeting card company, had the following statements prepared as of December 31, 2014.
BRECKER INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2014 AND 2013
12/31/14
12/31/13
$6,097
$9,181
62,049
49,120
35,042
17,884
39,830
60,152
4,973
4,117
153,780
127,330
(34,932
(25,015
45,990
50,080
$312,829
$292,849
$46,013
$41,921
4,136
5,887
7,830
4,062
7,924
10,090
59,955
66,922
101,980
101,980
28,220
28,220
56,771
33,767
$312,829
$292,849
BRECKER INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2014
$341,369
175,710
165,659
120,890
44,769
$11,424
2,088
9,336
35,433
6,604
$28,829
Additional information:
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
BRECKER INC.
Statement of Cash Flows
For the Year Ended December 31, 2014
Open Show Work
BRECKER INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2014 AND 2013
12/31/14
12/31/13
Cash$6,097
$9,181
Accounts receivable62,049
49,120
Short-term investments (available-for-sale)35,042
17,884
Inventory39,830
60,152
Prepaid rent4,973
4,117
Equipment153,780
127,330
Accumulated depreciation—equipment(34,932
)(25,015
) Copyrights45,990
50,080
Total assets$312,829
$292,849
Accounts payable$46,013
$41,921
Income taxes payable4,136
5,887
Salaries and wages payable7,830
4,062
Short-term loans payable7,924
10,090
Long-term loans payable59,955
66,922
Common stock, $10 par101,980
101,980
Contributed capital, common stock28,220
28,220
Retained earnings56,771
33,767
Total liabilities & stockholders’ equity$312,829
$292,849
Explanation / Answer
Cash flow indirect method Cash flow from operating activities Net income 28829 Adjustments to reconcile the net income Gain on sale of equipment -2088 Depreciation expense 30945 Amortization expense 4090 Changes in current asset and liabilities Increase in accounts receivable -12929 Increase in short term investment -17158 Decrease in inventory 20322 Increase in prepaid rent -856 Increase in accounts payable 4092 Decrease in income tax payable -1751 Increase in salaries and wages payable 3768 Decrease in short term notes payable -2166 26269 Cash flow from operating activities 55098 Cash flow from Investing activities Equipment purchased -56490 Equipment sold 11100 Cash flow from Investing activities -45390 Cash flow from Financing activities Long term notes payable -6967 Dividend -5825 Cash flow from Financing activities -12792 Net Cash and cash equivalent -3084 Add Beginning cash and cash equivalent 9181 Ending cash and cash equivalent 6097
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