Presented below is information for 2014 and 2013 related to the operations of Zy
ID: 2498209 • Letter: P
Question
Presented below is information for 2014 and 2013 related to the operations of Zyr Electronics.
December 31
2014
2013
2014
Cash
$ 32,400
$ 26,500
Sales
$298,000
Accounts receivable
26,800
23,200
Cost of goods sold
145,000
Inventory
23,500
34,000
Gross profit
153,000
Prepaid expenses
2,100
2,900
Depreciation expense
8,600
Land
45,000
45,000
Other operating expenses
114,000
Equipment
124,000
98,100
Income from operations
30,400
Accumulated depreciation
15,800
19,900
Loss on equipment disposal
1,400
Total
$238,000
$209,800
Income before income taxes
29,000
Income tax expense
9,800
Accounts payable
$ 32,400
$ 46,500
Net income
$ 19,200
Wages payable
11,000
9,700
Bonds payable
35,000
0
Common stock
109,000
105,000
Retained earnings
50,600
48,600
Total
$238,000
$209,800
Additional information:
In 2014, Zyr declared and paid a cash dividend of $17,200.
The company issued $35,000 of bonds at a discount for cash.
Equipment with a cost of $17,000 and a book value of $4,300 was sold for cash. New equipment was acquired for cash.
The company issued stock for cash.
Prepaid expenses pertain to operating expenses; accounts payable is only used for merchandise purchases.
Instructions:
Prepare a statement of cash flows in proper form for 2014, using the indirect method.
December 31
2014
2013
2014
Cash
$ 32,400
$ 26,500
Sales
$298,000
Accounts receivable
26,800
23,200
Cost of goods sold
145,000
Inventory
23,500
34,000
Gross profit
153,000
Prepaid expenses
2,100
2,900
Depreciation expense
8,600
Land
45,000
45,000
Other operating expenses
114,000
Equipment
124,000
98,100
Income from operations
30,400
Accumulated depreciation
15,800
19,900
Loss on equipment disposal
1,400
Total
$238,000
$209,800
Income before income taxes
29,000
Income tax expense
9,800
Accounts payable
$ 32,400
$ 46,500
Net income
$ 19,200
Wages payable
11,000
9,700
Bonds payable
35,000
0
Common stock
109,000
105,000
Retained earnings
50,600
48,600
Total
$238,000
$209,800
Explanation / Answer
Cash flow - indirect method
Net income $19,200 Add: Depreciation expenses $8,600 loss on equipment sale $1,400 increase in wages payable 1,300 Decrease in inventory 10,500 Decrease in prepaid expense 800 Less: Decrease in account payable (14,100) increase in aacount receivable (3,600) $4,900 Net cash flow from operating activities $24,100 Cash flow from investing activities: Cash from sale of equipment 2,900 purchase of equipment (42,900) (40,000) Net cash flow from financing activities Common Stock 4,000 Bonds payable 35,000 Cash dividend paid (17,200) $21,800 Net cash flow $5,900 Cash at beginning $26,500 Cash at end $32,400Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.