O\'Brien Corporation\'s income statement for the year ended December 31. 2012, a

Question

O'Brien Corporation's income statement for the year ended December 31. 2012, and its comparative balance sheets as of December 31, 2012 and 2011, are presented below. During 2012, O'Brien Corporation engaged in these transactions a Sold at a gain of $3,500 furniture and fixtures that cost $17.800, on which it had áccumulated depreciation of $14,400 b. Pürchased furniture and fxtures in the amount of $19,800. c. Paid a $10,000 note payable and borrowed $20,000 on a new note. d. Converted bonds payable in the amount of $50,000 into 2,000 shares of common stock. e. Declared and paid $3,000 in cash dividends. 0'Brian Corporation Income Statoment 3400 For the Year Ended Decomber 31, 2012 Sales Cost of goods sold Gross margin Operating expenses fincluding depreciation expense of $23,400) Income from operations Other income (expenses) $804,500 563.90 $240,500 224.200 15,900 $3,500 11E00 100 Gain on sale of furniture and foxtures Interest expense Income before income taxes Income taxes expense Net income s 7800 O'Brian Corporation Comparatva Balance Sheats Decsmber 31, 2012 and 2011 2012 2011 Assets 82,40025,000 100,000 Cash Accounts receivable (net) Merchandise inventory Prepsid rent Furniture and foctures Accumulated 175,000 225,000 1,500 1,000 74,000 fumiture and faxtures Total assets 411.500 Liabilitias and Stockholders Equity 71,700 $100,200 2,200 Accounts payable Income taxes payable Notes payable (longterm Bonds payable Common stock, $20 par vaLue Additional paid-in capital Retained earnings Total iabilities and stockholders' equity 0,000 S0,000 100,000 40,880 n schedule of mon carh inve a Shulemunt of carh Plouwn i r good fem, includ pnepone tronsac hons and fimoncich tnansachins sto foun wonk

Explanation / Answer

Cash flow from operating activities Net income 5500 Adjustments to reconcile the net income Depreciation expense 23400 Gain on sale of furniture -3500 Changes in current asset and liabilities decrease in prepaid rent 500 decrease in accounts receivable 17400 decrease in Inventory 50000 decrease in accounts payable -28500 decrease in income tax payable -1500 57800 Cash flow from operating activities 63300 Cash flow from Investing activities furniture and fixture purchased -19800 Frniture and fixture sold 6900 Cash flow from Investing activities -12900 Cash flow from Financing activities Notes payable issued 20000 notes payable paid -10000 Dividend paid -3000 Cash flow from Financing activities 7000 Net Cash and cash equivalent 57400 Add Beginning cash and cash equivalent 25000 Ending cash and cash equivalent 82400

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