1. Prepare the entire statement of Cash Flows for the year ended December 31, 20
ID: 2584237 • Letter: 1
Question
1. Prepare the entire statement of Cash Flows for the year ended December 31, 2011. Use direct method for the operations section.
2. Prepare the supplemental schedule showing how the operations section of the statement would have appeared if the Indirect method had been used. Preparation of a Statement of Cash Flows. The president of The Hardcastle Corporation ds that a statement of cash flows is one of the required financial statements. He asks your I. understan ussistance in preparing the statement. He provides you with the following comparative balance sheets for 2011 and 2010, as well as the income statement for the year ended December 31, 2011. THE HARDCASTLE CORPORATION Comparative Balance Sheets December 31. Assets 2011 2010 Current assets: Cash Accounts receivable Inventory Prepaid expenses $ 5,200 20,000 47,000 s 4,200 28,000 33,000 Total current assets $ 66,200 Property, plant, and equipment: Land Machinery and equipment, net Buildings, net $ 3,800 8,700 $ 2,800 8,500 Total property, plant, and equipment Other assets: Patents, net Total assets $126.200 Liabilities and Owners' Equity 2011 2010 Current liabilities: Notes payable Current maturities of long-term debt Accounts payable Accrued liabilities $ 4,000 2,000 5,500 $ 5,800 1,900 6,000 Total current liabilities Long-term debt: Stockholders' equity: $26,500 18,000 Common stock, no par Retained earnings $61,000 $ 60,000 Total stockholders' equity Total liabilities and stockholders' equity $129.700 $126,200 (continued )
Explanation / Answer
CASH FLOW STATEMENT - DIRECT METHOD
CASH FLOW STATEMENT - DIRECT METHOD
Account Receivables 182000 Addition to Building 7000 Sale proceeds of machinery 300 Addition to Plant & Machinery 1500 Notes Payable 1800 Long Term Debts repaid 12300 Account Payable 126500 Dividend 1700 Taxes 4000 Other general expenses, interest 26500 Opening Cash=4200 Closing Cash=5200 Net Increase in cash 1000 182300 182300 CASH FLOW STATEMENT - INDIRECT METHOD Net profit 14700 Increase in current assets 7500 Depreciation and amortization 13000 Increase in Fixed Assets 8000 Decrease in currnt liabilities 200 Decrease in long term debts 12000 27700 27700Related Questions
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