ODGERS INC. Comparative Balance Sheets December 31 Assets 2014 2013 $ 189,880 $
ID: 2494319 • Letter: O
Question
ODGERS INC.
Comparative Balance Sheets
December 31
Assets
2014
2013
$ 189,880
$ 113,740
206,330
89,300
264,375
241,698
66,740
61,100
324,300
256,150
669,750
569,875
(117,500
)
(122,200
)
$1,603,875
$1,209,663
Liabilities and Stockholders’ Equity
$ 239,700
$ 158,155
38,775
49,350
258,500
343,100
517,000
411,250
549,900
247,808
$1,603,875
$1,209,663
ODGERS INC.
Income Statement Data
For the Year Ended December 31, 2014
$912,881
$318,331
29,164
109,275
64,108
11,116
17,625
549,619
$ 363,262
Condensed financial data of Odgers Inc. follow.ODGERS INC.
Comparative Balance Sheets
December 31
Assets
2014
2013
Cash$ 189,880
$ 113,740
Accounts receivable206,330
89,300
Inventory264,375
241,698
Prepaid expenses66,740
61,100
Long-term investments324,300
256,150
Plant assets669,750
569,875
Accumulated depreciation(117,500
)
(122,200
)
Total$1,603,875
$1,209,663
Liabilities and Stockholders’ Equity
Accounts payable$ 239,700
$ 158,155
Accrued expenses payable38,775
49,350
Bonds payable258,500
343,100
Common stock517,000
411,250
Retained earnings549,900
247,808
Total$1,603,875
$1,209,663
ODGERS INC.
Income Statement Data
For the Year Ended December 31, 2014
$912,881
Less: Cost of goods sold$318,331
Operating expenses, excluding depreciation29,164
Depreciation expense109,275
Income tax expense64,108
Interest expense11,116
Loss on disposal of plant assets17,625
549,619
Net income$ 363,262
Additional information:
1. New plant assets costing $235,000 were purchased for cash during the year. 2. Old plant assets having an original cost of $135,125 and accumulated depreciation of $113,975 were sold for $3,525 cash. 3. Bonds payable matured and were paid off at face value for cash. 4. A cash dividend of $61,170 was declared and paid during the year.
Prepare a statement of cash flows using the indirect method.
Explanation / Answer
Cash flow statement
for the year ended 31 December,2014
Cash flow from operating activity
Net income 363262
Add: Depreciation 109275
Add: loss on sale 17625
add: income tax 64108
Add:interest expenses 11116
cash flow before working capital change 565386
add:increase in accounts payable 81545
less:increase in receivable 117030
increase in inventory 22677
increase in prepaid expenses 5640
decrease in accrued expenses 10575
491009
Less: income tax 64108
net cash from operating activity 426901
Cash flow from Investing activity
sale of plant and machinery 3525
purchase of machinery -235000
purchase of long term investment -68150
Net cash used in investing activity - 299625
Cash flow from financing activity
Interest paid -11116
cash dividend -61170
Bond payable -84600
issue of common stock 105750
net cash used in financing activity -51136
net increase in cash and cash equivalent 76140
Add: cash and cash equivalent at beginning 113740
Cash and cash equivalent at ending 189880
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