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Direct Method Cash Flow statement:
PLEASE DO NOT ANSWER IF YOU CAN NOT ANSWER QUESTIONS AND SHOWALL CALCULATIONS.
1. Gâs balance sheets for 2015 & 2016 and income statement for2016 follow:
2015 2016
Cash $45,000 $39,000
Receivables from customers,net 52,000 63,000
Inventory 25,000 20,000
Investments (including the adjustmentaccount) 42,000 60,000
Deferred taxassets 6,000 7,000
Plantassets 280,000 365,000
Accumulateddepreciation (97,000) (123,000)
$353,000 $431,000
Short-termdebt 15,000 13,000
Accountspayable 22,000 18,000
Income taxespayable 11,000 14,000
Other current accruedliabilities 2,277 6,141
Deferred taxliabilities 6,000 3,000
Capitalized leaseobligation 2,723 1,859
Pension-relatedobligation 50,000 58,000
Common stock ($1 parvalue) 10,000 10,000
Additional paid-in-capital, commonstock 165,000 165,000
Other comprehensive income âgain/loss 12,000 15,000
Retainedearnings 57,000 127,000
$353,000 $431,000
Sales $600,000
Cost of goodssold 210,000
Operatingexpenses 130,000
Investment-relatedincome 8,000
Interestexpense 1,000
Income beforetaxes 267,000
Income taxexpense 82,000
Netincome $185,000
Additional information for Gfollows:
· G is apublicly-traded company.
· Gâs operatingexpenses include depreciation AND the interest oncapital leases AND pension-related expense.
· Gâs interestexpense is on its short-term debt.
· Gâs investmentaccount relates solely to its portfolio of equityinvestments that G classified as trading securities. During 2016, Gadded to its portfolio by purchasing 1,000 shares of stock in AcmeCompany for $12 per share. During 2016, G did not sell any of itsequity investments. During 2016, G received $2,000 of dividendsrelated to these investments.
· Gâs plant assetsaccount includes capitalized lease assets.
· On 12-31-15, Gsigned a finance lease agreement that required G to make fourannual payments of $1,000 starting 12-31-15. Gâs incrementalborrowing rate was 5% at the time it signed the lease. As of12-31-15 and 12-31-16, this was Gâs only capitalized lease.
· Gâs accountspayable account is solely for inventory purchases.
· During the year,G made a $6,000 cash contribution to its pension plan.
· Gâs othercomprehensive income â gain/loss account relates solely to itspension plan.
· During 2016, Gdeclared and paid 4 quarterly cash dividends.
· G uses thedirect method and separates its receipts intoreceipts:
o From customers
o Other receipts(such as receipts from investment-related transactions)
· G uses thedirect method and separates its payments intopayments:
o To suppliers forinventory
o For otheroperating expenses
o For interest
o For incometaxes.
Prepare a COMPLETE statement of cash flows forG. Be sure to label your section answers as provided byOR used in. Also, prepare anynecessary footnote information/schedule G mustpresent.
BookmarkBookmarked
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home / study / business / accounting / questions and answers/
Direct Method Cash Flow statement:
PLEASE DO NOT ANSWER IF YOU CAN NOT ANSWER QUESTIONS AND SHOWALL CALCULATIONS.
1. Gâs balance sheets for 2015 & 2016 and income statement for2016 follow:
2015 2016
Cash $45,000 $39,000
Receivables from customers,net 52,000 63,000
Inventory 25,000 20,000
Investments (including the adjustmentaccount) 42,000 60,000
Deferred taxassets 6,000 7,000
Plantassets 280,000 365,000
Accumulateddepreciation (97,000) (123,000)
$353,000 $431,000
Short-termdebt 15,000 13,000
Accountspayable 22,000 18,000
Income taxespayable 11,000 14,000
Other current accruedliabilities 2,277 6,141
Deferred taxliabilities 6,000 3,000
Capitalized leaseobligation 2,723 1,859
Pension-relatedobligation 50,000 58,000
Common stock ($1 parvalue) 10,000 10,000
Additional paid-in-capital, commonstock 165,000 165,000
Other comprehensive income âgain/loss 12,000 15,000
Retainedearnings 57,000 127,000
$353,000 $431,000
Sales $600,000
Cost of goodssold 210,000
Operatingexpenses 130,000
Investment-relatedincome 8,000
Interestexpense 1,000
Income beforetaxes 267,000
Income taxexpense 82,000
Netincome $185,000
Additional information for Gfollows:
· G is apublicly-traded company.
· Gâs operatingexpenses include depreciation AND the interest oncapital leases AND pension-related expense.
· Gâs interestexpense is on its short-term debt.
· Gâs investmentaccount relates solely to its portfolio of equityinvestments that G classified as trading securities. During 2016, Gadded to its portfolio by purchasing 1,000 shares of stock in AcmeCompany for $12 per share. During 2016, G did not sell any of itsequity investments. During 2016, G received $2,000 of dividendsrelated to these investments.
· Gâs plant assetsaccount includes capitalized lease assets.
· On 12-31-15, Gsigned a finance lease agreement that required G to make fourannual payments of $1,000 starting 12-31-15. Gâs incrementalborrowing rate was 5% at the time it signed the lease. As of12-31-15 and 12-31-16, this was Gâs only capitalized lease.
· Gâs accountspayable account is solely for inventory purchases.
· During the year,G made a $6,000 cash contribution to its pension plan.
· Gâs othercomprehensive income â gain/loss account relates solely to itspension plan.
· During 2016, Gdeclared and paid 4 quarterly cash dividends.
· G uses thedirect method and separates its receipts intoreceipts:
o From customers
o Other receipts(such as receipts from investment-related transactions)
· G uses thedirect method and separates its payments intopayments:
o To suppliers forinventory
o For otheroperating expenses
o For interest
o For incometaxes.
Prepare a COMPLETE statement of cash flows forG. Be sure to label your section answers as provided byOR used in. Also, prepare anynecessary footnote information/schedule G mustpresent.
BookmarkBookmarked
.
