This is a comprehensive problem all contained on this spreadsheet tab. You are t

Question

This is a comprehensive problem all contained on this spreadsheet tab. You are to prepare a cash flow statement, a vertical analysis, a horizontal analysis, and some ratio calculations. Scroll down the spreadsheet to complete each part. Philadelphia Widget Corporation is in the process of preparing financial statements for the year ended 12/31/2015. They have completed the balance sheet and income statement as shown. Philadelphia Widget Corporation Income Statement For the year ended 12/31/2015 Revenue 1 235 000 Cost of Goods Sold 806 356 Gross Profit 428 644 Administrative Expenses: Salaries 212 450 Rent 82 500 Depreciation 24 800 Total Administrative Expense 319 750 Operating Profit 108 894 Gain on Sale of Equipment 4 500 Interest Expense (42 115) Net Income 71 279 Philadelphia Widget Corporation Balance Sheet As of 12/31/2015, 12/31/2014, and 12/31/2013 2015 2014 2013 Cash 119 411 89 564 105 644 Accounts Receivable 85 455 83 118 78 400 Inventory 41 600 48 560 62 600 Prepaid Expenses 14 500 18 100 24 000 Total Current Assets 260 966 239 342 270 644 Land 50 000 50 000 50 000 Buildings and Equipment 182 450 172 450 166 800 Accumulated Depreciation 78 900 103 550 62 600 109 850 54 580 112 220 Total Assets 414 516 399 192 432 864 Accounts Payable 62 525 51 480 45 200 Wages payable 4 500 4 500 1 500 Unearned Revenue 3 000 -   -   Current Portion of Long-Term Debt 50 000 50 000 50 000 Total Current Liabilities 120 025 105 980 96 700 Long-Term Debt 175 000 225 000 275 000 Common Stock, 3500 shares outstanding 35 000 35 000 35 000 Retained Earnings 84 491 33 212 26 164 Total Stockholders' Equity 119 491 68 212 61 164 Total Liabilities and Equity 414 516 399 192 432 864 A. Prepare a Statement of Cash Flow using the indirect method for 2015 using the above statements and the following additional information:    1. Equipment costing $30,000 was purchased in 2015.    2. Equipment having an original cost of $20,000 and accumulated depreciation of $8,500 was sold for $16,000 during 2015.    3. A dividend of $20,000 was declared and paid in 2015. Philadelphia Widget Corporation Statement of Cash Flow For the year ended 12/31/2015 This is a comprehensive problem all contained on this spreadsheet tab. You are to prepare a cash flow statement, a vertical analysis, a horizontal analysis, and some ratio calculations. Scroll down the spreadsheet to complete each part. Philadelphia Widget Corporation is in the process of preparing financial statements for the year ended 12/31/2015. They have completed the balance sheet and income statement as shown. Philadelphia Widget Corporation Income Statement For the year ended 12/31/2015 Revenue 1 235 000 Cost of Goods Sold 806 356 Gross Profit 428 644 Administrative Expenses: Salaries 212 450 Rent 82 500 Depreciation 24 800 Total Administrative Expense 319 750 Operating Profit 108 894 Gain on Sale of Equipment 4 500 Interest Expense (42 115) Net Income 71 279 Philadelphia Widget Corporation Balance Sheet As of 12/31/2015, 12/31/2014, and 12/31/2013 2015 2014 2013 Cash 119 411 89 564 105 644 Accounts Receivable 85 455 83 118 78 400 Inventory 41 600 48 560 62 600 Prepaid Expenses 14 500 18 100 24 000 Total Current Assets 260 966 239 342 270 644 Land 50 000 50 000 50 000 Buildings and Equipment 182 450 172 450 166 800 Accumulated Depreciation 78 900 103 550 62 600 109 850 54 580 112 220 Total Assets 414 516 399 192 432 864 Accounts Payable 62 525 51 480 45 200 Wages payable 4 500 4 500 1 500 Unearned Revenue 3 000 -   -   Current Portion of Long-Term Debt 50 000 50 000 50 000 Total Current Liabilities 120 025 105 980 96 700 Long-Term Debt 175 000 225 000 275 000 Common Stock, 3500 shares outstanding 35 000 35 000 35 000 Retained Earnings 84 491 33 212 26 164 Total Stockholders' Equity 119 491 68 212 61 164 Total Liabilities and Equity 414 516 399 192 432 864 A. Prepare a Statement of Cash Flow using the indirect method for 2015 using the above statements and the following additional information:    1. Equipment costing $30,000 was purchased in 2015.    2. Equipment having an original cost of $20,000 and accumulated depreciation of $8,500 was sold for $16,000 during 2015.    3. A dividend of $20,000 was declared and paid in 2015. Philadelphia Widget Corporation Statement of Cash Flow For the year ended 12/31/2015

Explanation / Answer

Statement of Cash Flows ( Indirect Method) for the year ended 12/31/2015

$ $ Cash flows from operating activities Net income 71,279 Adjustments for noncash / nonoperating items Add Depreciation expense 24,800 Interest expense 42,115 Gain on sale of equipment (4,500) 62,415 Operating profit before working capital changes 133,694 Increase in accounts receivable (2,337) Decrease in inventory 6,960 Decrease in prepaid expenses 3,600 Increase in accounts payable 11,045 Increase in unearned revenue 3,000 22,268 Net cash flows from operating activities 155,962 Cash flows from investing activities Purchase of equipment (30,000) Sale of equipment 16,000 Net cash used in investing activities (14,000) Cash flows from financing activities Dividends paid (20,000) Interest paid (42,115) Redemption of long-term debt (50,000) Net cash used in financing activities (112,115) Net increase in cash and cash equivalents 29,847 Beginning cash balance 89,564 Ending cash balance 119,411

Related Questions

Navigate

• Browse (All)
• Browse T
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.