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The followingfinancial statements and additional information are reported.
Comparative Balance Sheets
June 30, 2015 and 2014
2015 2014
Cash $ 111,800 $ 69,700
Accounts receivable, net 69,100 51,200
Inventory 65,900 96,200
Prepaid expenses 5,000 5,600
Total current assets 251,800 222,700
Equipment 125,800 115,000
Accum. depreciation—Equipment (28,700 ) (10,700 )
Total assets $ 348,900 $ 327,000
Liabilities and Equity
Accounts payable $ 26,500 $ 32,200
Wages payable 7,900 16,900
Income taxes payable 2,800 3,600
Total current liabilities 37,200 52,700
Notes payable (long term) 50,000 77,000
Total liabilities 87,200 129,700
Common stock, $5 par value 237,000 189,000
Retained earnings 24,700 8,300
Total liabilities and equity $ 348,900 $ 327,000

Income Statement
For Year Ended June 30, 2015
Sales $ 677,000
Costof goods sold 411,000
Gross profit 266,000
Operating expenses
Depreciation expense $ 58,600
Other expenses 66,900
Total operating expenses 125,500
Other gains (losses)
Gain on sale ofequipment 2,700
Income before taxes 143,200
Income taxes expense 57,280
Netincome $ 85,920

Additional Information
a. A $27,000 notepayable is retired at its $27,000 carrying (book) value in exchangefor cash.
b. The only changesaffecting retained earnings are net income and cash dividendspaid.
c. New equipment isacquired for $59,500 cash.
d. Received cashfor the sale of equipment that had cost $48,700, yielding a $2,700gain.
e. Prepaid Expensesand Wages Payable relate to Other Expenses on the incomestatement.
f. All purchasesand sales of inventory are on credit.

(1) Prepare a statement of cash flows for the year ended June30, 2015, using the indirect method. (Amounts to bededucted should be indicated with a minus sign.)

Statement of Cash Flows(Indirect Method)
For Year Ended June 30,2015
Cash flows from operatingactivities
Net income $85,920
Adjustments toreconcile net income to net cash provided by operatingactivities
Income statement items notaffecting cash
Depreciation expense
Gain on sale of plantassets
Changes in current operatingassets and liabilities
Decrease in inventory
Decrease in prepaid expenses
Decrease in accounts payable
Decrease in wages payable
Decrease in income taxes payable
Net cash providedby operating activities $85,920
Cash flows from investingactivities
Cash received from sale ofequipment
Cash paid for equipment
Net cash used in investingactivities 0
Cash flows from financingactivities
Cash received from stockissuance
Cash paid to retire notes
Cash paid for dividends
Net cash used in financingactivities 0
Net increase (decrease) incash $85,920
Cash balance at prioryear-end
Cash balance atcurrent year-end $85,920

(2) Compute the company's cash flow on total assets ratio forits fiscal year 2015.

Cash Flow on Total AssetsRatio
ChooseNumerator: / ChooseDenominator: = Cash Flow on TotalAssets Ratio
/ = Cash flow on totalassets ratio
/ =

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Patrina Schowalter
Patrina SchowalterLv2
28 Sep 2019

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