Attached are the income statement and statement of stockholdersâ equity for Varney Corp for the year ended 12/31/2014 and the comparative balance sheet information at 12/31/2013 and 12/31/2014. The following additional information is provided:
During 2014 Varney purchased land and a building through a $200,000 cash purchase. There were no disposals of operating assets during 2014. The building is the only depreciable operating asset that Varney owned during 2014
During 2014, Varney issued 5,000 shares of its own common stock for $50,000
During 2014, Varney repurchased 2,000 shares of its own common stock for $18,000
The other operating expenses were paid in full during 2014
During 2014, $2,000 of dividends were paid to stockholders
An equity statement is not shown because all relevant information to the statement of cash flows has been provided
Required:
Prepare a statement of cash flows for Varney Corp. for the year ended 12/31/2014 using the âindirectâ method of presenting operating cash flows.
Varney Corp.
Income Statement
Year Ended 12/31/2014
Revenues and Gains:
Sales Revenue
$1,118,000
Expenses and Losses:
Cost of Goods Sold
$ 614.600
Salaries and Wages Expense
206,800
Rent Expense
9,000
Depreciation Expense
4,000
Other Operating Expenses
123,180
Interest Expense
2,000
963,580
Net Income
$ 158,420
Varney Corp.
Comparative Balance Sheet Information
12/31/2013 & 12/31/2014
Assets:
12/31/2013
12/31/2014
Change
Cash
$ 85,800
$136,900
$ +51,100
Accounts Receivable
73,500
115,520
+42,020
Inventory
40,000
15,400
- 24,600
Prepaid Rent
3,000
0
-3,000
Operating Assets (Net)
0
196,000
+196,000
Total Assets
$202,300
$463,820
$+261,520
Liabilities and Stockholdersâ Equity:
Accounts Payable
$ 51,500
$120,000
$ +68,500
Salaries & Wages Payable
900
6,000
+ 5,100
Interest Payable
500
0
- 500
Notes Payable
50,000
50,000
0
Paid-in Capital
75,000
125,000
+50,000
Retained Earnings
24,400
180,820
+156,420
Treasury Stock
0
(18,000)
-18,000
Total Liabilities & Stockholdersâ Equity
$202,300
$463,820
$+261,520
Attached are the income statement and statement of stockholdersâ equity for Varney Corp for the year ended 12/31/2014 and the comparative balance sheet information at 12/31/2013 and 12/31/2014. The following additional information is provided:
During 2014 Varney purchased land and a building through a $200,000 cash purchase. There were no disposals of operating assets during 2014. The building is the only depreciable operating asset that Varney owned during 2014
During 2014, Varney issued 5,000 shares of its own common stock for $50,000
During 2014, Varney repurchased 2,000 shares of its own common stock for $18,000
The other operating expenses were paid in full during 2014
During 2014, $2,000 of dividends were paid to stockholders
An equity statement is not shown because all relevant information to the statement of cash flows has been provided
Required:
Prepare a statement of cash flows for Varney Corp. for the year ended 12/31/2014 using the âindirectâ method of presenting operating cash flows.
Varney Corp. | |||||
Income Statement | |||||
Year Ended 12/31/2014 | |||||
Revenues and Gains: | |||||
Sales Revenue | $1,118,000 | ||||
Expenses and Losses: | |||||
Cost of Goods Sold | $ 614.600 | ||||
Salaries and Wages Expense | 206,800 | ||||
Rent Expense | 9,000 | ||||
Depreciation Expense | 4,000 | ||||
Other Operating Expenses | 123,180 | ||||
Interest Expense | 2,000 | 963,580 | |||
Net Income | $ 158,420 | ||||
Varney Corp. | |||||
Comparative Balance Sheet Information | |||||
12/31/2013 & 12/31/2014 | |||||
Assets: | 12/31/2013 | 12/31/2014 | Change | ||
Cash | $ 85,800 | $136,900 | $ +51,100 | ||
Accounts Receivable | 73,500 | 115,520 | +42,020 | ||
Inventory | 40,000 | 15,400 | - 24,600 | ||
Prepaid Rent | 3,000 | 0 | -3,000 | ||
Operating Assets (Net) | 0 | 196,000 | +196,000 | ||
Total Assets | $202,300 | $463,820 | $+261,520 | ||
Liabilities and Stockholdersâ Equity: | |||||
Accounts Payable | $ 51,500 | $120,000 | $ +68,500 | ||
Salaries & Wages Payable | 900 | 6,000 | + 5,100 | ||
Interest Payable | 500 | 0 | - 500 | ||
Notes Payable | 50,000 | 50,000 | 0 | ||
Paid-in Capital | 75,000 | 125,000 | +50,000 | ||
Retained Earnings | 24,400 | 180,820 | +156,420 | ||
Treasury Stock | 0 | (18,000) | -18,000 | ||
Total Liabilities & Stockholdersâ Equity | $202,300 | $463,820 | $+261,520 |