Additional information for Year 2: Based on the outstanding job of the asset man
ID: 2425101 • Letter: A
Question
Additional information for Year 2:
Based on the outstanding job of the asset managers, none of the accounts receivable were written off.
The CFO sold investments in Year 2 worth
$25,000
The asset acquisitions manager sold equipment she had purchased for
$20,000
>>>>When the equipment was sold, it had already been depreciated by
40%
The Board of Directors declared and paid dividends in Year 2.
Common stock was issued in exchange for a plot of land the company planned to develop in the future.
Operating Expenses:
Uncollectible Accounts Expense
$ 3,000
Depreciation Expense: Buildings
8,000
Depreciation Expense: Equipment
13,500
0
Year 2
Year 1
Assets
Current Assets
Cash
$ 60,000
$ 71,500
Investment
30,000
55,000
Accounts receivable
$152,000
$136,000
Less Allowance for uncollectible accounts
6,000
146,000
3,000
133,000
Inventory
118,000
84,000
Total Current Assets
$354,000
$343,500
Property, Plant, & Equipment
Land
$ 50,000
$ 15,000
Buildings
$160,000
$160,000
Less Accumulated depreciation on Buildings
40,000
120,000
32,000
128,000
Equipment
60,000
41,500
Less Accumulated depreciation: Equipment
24,000
36,000
18,500
23,000
Total Property, Plant, & Equipment
206,000
166,000
Total Assets
$560,000
$509,500
Liabilities & Stockholder's Equity
Liabilities
Accounts payable
$102,000
$ 95,000
Income taxes payable
13,000
8,000
Long term notes payable
65,000
80,000
Total liabilities
$180,000
$183,000
Stockholder's Equity
Common stock
$295,000
$236,500
Retained earnings
85,000
90,000
Total Stockholder's Equity
$380,000
$326,500
Total Liabilities & Stockholder's Equity
$560,000
$509,500
Income statement
Sales
$750,000
Less: Cost of Goods Sold
480,000
Gross profit
270,000
Operating Expenses
145,000
Income from Operations
125,000
Other Revenue & Expenses
Gain on sale of investments
$ 7,000
Loss on sale of equipment
(4,000)
3,000
Income before taxes
128,000
Income tax expense
52,000
Net Income
$ 76,000
PLease I need statement of Cash flow both Direct and indirect methods. If there there is need for clarification please email me on brutuspeter@yahoo.com and i will send you the attached excel sheet. I cant find option to attachedit here, thus the copy and past option. THanks
Additional information for Year 2:
Based on the outstanding job of the asset managers, none of the accounts receivable were written off.
The CFO sold investments in Year 2 worth
$25,000
The asset acquisitions manager sold equipment she had purchased for
$20,000
>>>>When the equipment was sold, it had already been depreciated by
40%
The Board of Directors declared and paid dividends in Year 2.
Common stock was issued in exchange for a plot of land the company planned to develop in the future.
Operating Expenses:
Uncollectible Accounts Expense
$ 3,000
Depreciation Expense: Buildings
8,000
Depreciation Expense: Equipment
13,500
Explanation / Answer
Cash Flow statement - Indirect method
Particulars Amount Amount Cash Flow from Operating Activities Net Income $ 76,000 Add/-Less : Non-Cash/Non Operating expenses/incomes Gain on sale of investment - $ 7,000 Loss on sale of Equipment $ 4,000 Depreciation $ 13,500 net income After Adjustment $ 86,500 Add: Decrease in CA and increase in CL Accounts Payable $ 7,000 Income Tax payable $ 5,000 Less : Increase in CA and decrease in CL Accounts receivable - $ 13,000 Inventory - $ 34,000 Cash flow from operating Activities $ 51,500 Cash Flow from Investing Activities Sale of Investment $ 25,000 Gain on Investment $ 7,000 Purchase of Land ( issue of Shares) Change in Equipment - $ 18,500 Loss on sale of equipment - $ 4,000 Cash from Investin Activity $ 9,500 Cash Flow from Financial Activity Long term note payable - $15,000 issue of capital (59,000 - 35,000) $ 23,500 dividend paid - $ 81,000 Cash used in Financing Activities - $ 72,500 Net change in Cash - $ 11,500 Opening Cash $ 71,500 Closing Cash $ 60,000Related Questions
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