ACCT Quiz Question (Please show work) Acct3021 Spring 2018 Suiz Name Group Harla

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ACCT Quiz Question

(Please show work)

Acct3021 Spring 2018 Suiz Name Group Harlan Mining Co. has recently decided to make the company go public". Harian is anxious to have its statement of cash flow prepared. Financial statements for 2019 and 2018 are provided beo BALANCE SHEETS 12/31/18 Cash Accounts receivable Inventory Property, plant and equipment Less accumulated depreciation 12/31/19 $408,000 360,000 384,000 $608,000 (320, 000) $ 192,000 216,000 480,000 $960,000 304,000) 440 44,0 Accounts payable Income taxes payable Bonds payable Common stock Retained earnings 176,000 352,000 360,000 216,000 336,000 $ 96,000 392,000 600,000 216,000 240, 000 INCOME STATEMENT for the Year Ended December 31, 2019 sales revenue Cost of sales Gross profit Selling expenses Administrative expenses Income from operations Interest expense Income before taxes Income taxes Net income $8,400, 000 7,152,000 1,248,000 $600,000 192,000 456,000 72,000 384,000 96,000 S 288,000 The following additional data were provided: i. Dividends for the year 2019 were $192,000. ii. During 2019, equipment was sold for $240,000. This equipment cost $352,000 originally and had a book value of $288,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales. iii. All depreciation expense is in the selling expense category. 4. Under the direct method, the cash received from customers equals 5. The asmount of total taxes paid is

Explanation / Answer

Solution :

4 Cash Received from Customers                                                           Accounts receivable A/c Opening Balance              216,000 By Cash Received                  8,256,000 *** ( balancing figure) To Sales           8,400,000 Closing Balance                      360,000           8,616,000                  8,616,000 5 Income tax paid                                                           Income tax payable A/c To Cash paid              136,000 By opening Balance                      392,000 *** ( balancing figure) To Closing balance              352,000 By Profit & loss Provision                        96,000              488,000                      488,000

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