Fully depreciated equipment costing $60,000 was scrapscrapped, no salvage, and n
ID: 2562125 • Letter: F
Question
Fully depreciated equipment costing $60,000 was scrapscrapped, no salvage, and new equipment was purchased for $1832002. Bonds payable for $100,000 were retired by payment at their face amount
3. 5,000 shares of common stock were issued at $13 for cash
4. Cash dividends declared and paid $25,000
5. Prepare a statement of cash flow using the Indirect method of reporting cash flow from operating activities. Fully depreciated equipment costing $60,000 was scrapscrapped, no salvage, and new equipment was purchased for $183200
2. Bonds payable for $100,000 were retired by payment at their face amount
3. 5,000 shares of common stock were issued at $13 for cash
4. Cash dividends declared and paid $25,000
5. Prepare a statement of cash flow using the Indirect method of reporting cash flow from operating activities. Stmt of Cash Flow Direct Method The comparative balance sheets of Posner Company, for Years 1 and 2 ended December 31, appear below in condensed form: Year Year 1 S 53,000 50,000 48,000 100,000 70,000 450,000 142000 76000) $542,000 Cash Accounts receivable (net) 37,000 108,500 573,200 $629 700 S 43,800 100,000 285,000 55,000 162200SS 200 $629 700 542000 S 62,500 Accounts payable Bonds payable, due Year 2 Common stock, $10 par Paidin capital in excess of parcommon stock Retained eanings 325,000 80,000 The income statement for the current year is as follows $625,700 340.000 $285,700 Sales Cost of merchandise sold Gross profit Operating Depreciation expense 26,000 Other operating expenses 68000-94000 $191,700 Income from operations Other income: Gain on sale of investment 4,000 Other expense: Interest expense 2.000 Income before income tax Income tax Net income S189,700 129.000
Explanation / Answer
Notes:
1. Cash receipts from sales = Sales + Decrease in AR = $625700 + 11000 = $636700
2. Cash payments for purchases = Cost of goods sold + Increase in inventory - Increase in accounts payable = $340000 + 8500 - 18700 = $329800
3. Cash payment for operating expenses = Other operating expenses = $68000
4. Cash interest = Interest expense = $6000
5. Cash payment for income taxes = Income tax expense = $60700
Statement of cash flows (direct method)
Statement of cash flows (indirect method)
Cash flow from operating activities: Cash receipts from sales $636700 Cash payments for purchases -329800 Cash payment for operating expenses -68000 Cash interest -6000 Cash payment for income taxes -60700 Net Cash flow from operating activities $172200 Cash flow from investing activities: Sale of investments 74000 Purchase of equipment -183200 Net Cash flow from investing activities -$109200 Cash flow from financing activities: Issue of common stock 65000 Retirement of bonds -100000 Cash dividends paid -25000 Net Cash flow from financing activities -$60000 Net increase (decrease) in cash $3000 Beginning cash balance 50000 Ending cash balance $53000Related Questions
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