OW information is taken from the accounting records of the Gilford Corporation.
ID: 2512546 • Letter: O
Question
OW information is taken from the accounting records of the Gilford Corporation. Use following this infomation to prepare Gilford's statement of cash flows for the year ended December 31, Cash Accounts Receivable (Net) Merchandise Inventory Prepaid Expenses Plant and Equipment Dec. 31, 2005 S 95,000 100,000 90,000 12,000 300,000 (55.000 Dec. 31, 2004 $ 85,000 80,000 83,000 7,000 240,000 Notes Payable Accounts Payable Payroll Taxes Payable Estimated Income Taxes Payable 8% Bonds Payable 2015 Common Stock Retained Earnings $20,000 50,000 12,000 15,000 110,000 250,000 $25,000 44,000 10,000 11,000 95,000 200,000 $342.000 Additional information: a. Plant construction costing $40,000 in cash was completed b. Equipment was purchased for $20,000 in cash. c. Common stock was sold for $50,000 in cash. d. Bonds were issued for $15,000 in cash. e. Common stock dividends of $20,000 were paid in cash. f. Net income after income taxes was $35,000.Explanation / Answer
Gilford Corporation Statement of Cash Flows For the Year Ended December 31, 2005 Cash Flows from Operating Activities Net income 35000 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense 15000 Increase in accounts receivable -20000 Increase in merchandise inventory -7000 Increase in prepaid expenses -5000 Increase in accounts payable 6000 Increase in payroll taxes payable 2000 Increase in income taxes payable 4000 -5000 Net cash provided by operating activities 30000 Cash Flows from Investing Activities Plant construction -40000 Purchase of equipment -20000 Net cash used by investing activities -60000 Cash Flows from Financing Activities Repayment of notes payable -5000 Issuance of common stock 50000 Issuance of bonds payable 15000 Payment of dividends -20000 Net cash provided by financing activities 40000 Net increase (decrease) in cash 10000 Cash balance, Dec. 31, 2004 85000 Cash balance, Dec. 31, 2005 95000
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