Exercise 23-14 Brecker Inc., a greeting card company, had the following statemen

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

$6,042

$9,010

61,919

48,944

35,081

18,134

39,832

59,848

5,024

3,871

153,690

125,490

(35,020

)

(25,011

)

45,804

49,832

$312,372

$290,118

$45,972

$42,105

4,020

6,181

7,936

4,151

8,112

9,894

59,890

66,891

102,900

102,900

32,580

32,580

50,962

25,416

$312,372

$290,118

BRECKER INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2014

$342,757

175,600

167,157

119,960

47,197

$11,334

2,081

9,253

37,944

6,663

$31,281

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

Link to Text

BRECKER INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2014 AND 2013

12/31/14

12/31/13

Cash

$6,042

$9,010

Accounts receivable

61,919

48,944

Short-term investments (available-for-sale)

35,081

18,134

Inventory

39,832

59,848

Prepaid rent

5,024

3,871

Equipment

153,690

125,490

Accumulated depreciation—equipment

(35,020

)

(25,011

)

Copyrights

45,804

49,832

Total assets

$312,372

$290,118

Accounts payable

$45,972

$42,105

Income taxes payable

4,020

6,181

Salaries and wages payable

7,936

4,151

Short-term loans payable

8,112

9,894

Long-term loans payable

59,890

66,891

Common stock, $10 par

102,900

102,900

Contributed capital, common stock

32,580

32,580

Retained earnings

50,962

25,416

Total liabilities & stockholders’ equity

$312,372

$290,118

Explanation / Answer

Brecker Inc. Statement of Cash Flows (Indirect Method) For the Year ended Dec. 31, 2014 Cash Flow from opearating activities: Net Income            31,281 Gain on Sale of Equipment            (2,081) Deprecition - Equipments            32,192 Amortization of Copyrights              4,028 Add/(Less) non cash effects on operating activities Increase in Accounts receivables         (12,975) Decrease in Inventory            20,016 Increase in Prepaid rent            (1,153) Incerase in Available-for-sale securities         (16,947) Increase in Accounts Payables              3,867 Decrease in I Tax Payable            (2,161) Increase in Salaries & Wages Payables              3,785 Decrease in Short term Loan payable            (1,782)            26,789 Net Cash provided by operating activities            58,070 Cash flow from Investing Activities Purchase of Equipment         (59,890) Sale of Equipment            11,588 Cash Flow / (used) from Investing activities          (48,302) Cash Flow from Financing Activities Cash dividend paid            (5,735) Repayment of Long Term Loan            (7,001) Cash Flow from Financing Activities          (12,736) Net Increase / (Decrease) in Cash            (2,968) Cash & Cash Equivalent as on Dec 31, 2013              9,010 Cash & Cash Equivalent as on Dec 31, 2014              6,042 Equipment Account Particulars Amt Particulars Amt To Balance B/f 125490 By Cash                11,588 To Gain on sale of equipment                  2,081 Accumulated dep - Equipment                22,183 To Cash (Bal. Fig.)                59,890 By Balance B/f              153,690              187,461              187,461 Accumulated dep. - Equipment Particulars Amt Particulars Amt To Accumulated Dep.                22,183 By Balance b/f                25,011 To Balance C/f                35,020 By Income Statement (Bal. Fig.)                32,192                57,203                57,203

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