A. calculate the amount of cash dividends paid during 2012. B. calculate the dep

Question

A. calculate the amount of cash dividends paid during 2012.
B. calculate the depreciation incurred during 2012.
C. Prepare a statement of retained earnings for the year ended December 31, 2012.
D. Prepare the statement of cash flows for the year ended December 31, 2012.

Trie Gless ractory. inc has ju statement are presented below. Two ot the four kry financial stetements remmsin to be erepared for the stuckholders' report st ended the 2012 production year The balance sheet and income December 33.2011 and 2012 s 1000 7,000 Gross fixed assets 517,000 Accounts payable 5 2,000 $ 1,500 Notes payable 2,500 Long-term debt Common stock at par Paid-in capital in excess of par Retained earnings Total iabilities and stockholders' equity 5,500 500 523,000 5,500 500 Glass Factory, Inc. Sales Cost of goods sold Gross profits $40,000 10,000 Operating profits Interest expense Net profits before taxes Taxes 140%) Net Income after taxes 2,000 $ 4,000 1600 Required: a. Calculate the amount of cash dividends paid during 2012. b. Calculate the depreciation expense incurred during 2012. c. Prepare a statement of retained earnings for the year ended December 31, 2012 d. Prepare the statement of cash flows for the year ended December 31, 2012.

Explanation / Answer

Glass Factory Company A) Dividend paid during 2012=$1400 B) Depreciation incurred during 2012=$1000 C ) Retained Earnings Statement Beginning Retained Earnings $                      500.00 Add: Net Income $                24,000.00 Less: Dividend Paid $                   1,400.00 Ending Retained Earnings $                   1,500.00 Glass Factory Company D) Statement of Cash Flow For the year ended December 31,2012 Cash flows from operating activities Net income after tax $                                        2,400.00 Adjustments to net income     Depreciation=($2000-$1000) $                   1,000.00     Increase in accounts receivable=($5000-$4500) $                    (500.00)     Increase in inventories=($7000-$6000) $                (1,000.00)     Increase in accounts payable=($2000-$1500) $                      500.00     Increase in Notes Payable=($2000-$1500) $                      500.00 $                                            500.00       Net cash provided by operating activities=(A) $                                        2,900.00 Cash flows from investing activities Purchase of fixed Assets($20000-$15000) $                (5,000.00)       Net cash provided by investing activities =(B) $                                      (5,000.00) Cash flows from financing activities Borrowings from long term debt(10000-6000) $                   4,000.00 Cash dividends on common stock (given)=($500+$2400-$1500) $                (1,400.00)       Net cash provided by financing activities=(C ) $                                        2,600.00 Change in cash=(A)+(B)+(C ) $                                            500.00 Cash, beginning balance $                                            500.00 Cash, ending balance $                                        1,000.00 Property,Plant & Equipment A/C Particular Amount Particular Amount To Bal b/d $                15,000.00 By Bal C/d $         20,000.00 To Cash(Balancing Figure) $                   5,000.00 $                20,000.00 $         20,000.00 Calculation of Amount of Dividend Paid Retained Earnings of Last Year $                      500.00 Current Year Net Profit $                   2,400.00 Retained Earnings of Current Year $                   1,500.00 Dividend Paid=($500+$2400-$1500) $                   1,400.00

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