Kinkajú Technologies, Inc. has the following financial statements for the fiscal
ID: 2608585 • Letter: K
Question
Kinkajú Technologies, Inc. has the following financial statements for the fiscal year ending 31OCT2015:
Additional Information:
During the fiscal year ending 31OCT2015 equipment was acquired for $20,000 cash; the firm also sold equipment that had costed $9,500, with a book value of $5,500, for $3,000 cash.
On January 31st, 2015 the firm converted $100,000 of 10% convertible bonds issued at face value with interest payment dates of April 30 and October 31 into 2,000 shares of Kinkajú $40 par value common stock. Said stock had a market value of $50 at the date of conversion.
Kinkajú paid dividends of $8,000 during 2015.
Kinkajú issued an additional 100 shares of common stock for cash during 2015.
Required:
As per SFAS No. 95 of 1988, prepare a Statement of Cash Flows for Kinkajú for the year ended October 31st, 2015 using the direct method.
As per SFAS No. 95 of 1988, reconcile operational cash flows using the indirect method for Kinkajú for the year ended October 31st, 2015.
Kinkajú Technologies, Inc. Income Statement For the Year Ended October 31, 2015 300,000 Sales Revenue CGS Gross Profit 180,000 Operating Expenses Salaries Operating Income Other Revenues/Expenses 50,000 6,000 56,000 124,000 Loss on sale of equipment Interest Expense 2,500 Income Before Taxes 119,000 Income Tax Expense Net Income 71,000 Retained Earnings Subtotal Cash dividends paid November 1, 2014 158,000 Retained Earnings October 31t, 2015 $150,000Explanation / Answer
STATEMENT OF CASH FLOWS (DIRECT METHOD) Cash flows from operating activities: Cash received from customers (300000-20000) 280000 Cash paid to suppliers and employees (120000+50000+7000-10000+15000-5000) -187000 Interest paid -2500 Income taxes paid (48000+13000-3000) -58000 Net cash provided by operating activities 32500 Cash flows from investing activities: Purchase of equipment -20000 Sale of equipment 3000 Net cash used by operating activities -17000 Cash flows from financing activities: Dividends paid -8000 Common stock issued 5000 Net cash used by financing activitie -3000 Net increase in cash and cash equivalents 12500 Cash & cash equivalents at the beginning of year 86000 Cash & cash equivalents at the end of year 98500 RECONCILIATION OF NET INCOME TO NET CASH PROVIDED BY OPERTING ACTIVITIES Cash flows from operating activities: Net income 71000 Adjustments to reconcile net income with net cash from operating activities: Depreciation 6000 Loss on sale of equipment 2500 Increase in accounts receivable -20000 Increase in inventory -15000 Decrease in accounts payable -5000 Increase in salaries payable 3000 Decrease in taxes payable -10000 -38500 32500
Related Questions
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.