The 2016 and 2015 comparative balance sheets and 2016 incomestatement of Outdoor Supply Corp.â follow:
Outdoor Supply Corp.
Comparative Balance Sheets
December 31,
Increase
2016
2015
(Decrease)
Current assets:
Cash and cash equivalents
$65,300
$5,000
$60,300
Accounts receivable
47,700
42,500
5,200
Inventories
58,600
57,400
1,200
Prepaid expenses
1,700
4,800
(3,100)
Plant assets:
Land
59,000
21,900
37,100
Equipment, net
53,700
49,400
4,300
Total assets
$286,000
$181,000
$105,000
Current liabilities:
Accounts payable
$35,200
$27,800
$7,400
Salary payable
26,000
15,100
10,900
Other accrued liabilities
20,600
23,700
(3,100)
Long-term liabilities:
Notes payable
65,000
35,000
30,000
Stockholders' equity:
Common stock, no-par
89,100
66,400
22,700
Retained earnings
50,100
13,000
37,100
Total liabilities and stockholders' equity
$286,000
$181,000
$105,000
Outdoor Supply Corp.
Income Statement
Year Ended December 31, 2016
Revenues:
Sales revenue
$447,000
Expenses:
Cost of goods sold
$187,000
Salary expense
76,200
Depreciation expense
17,400
Other operating expense
49,700
Interest expense
24,700
Income tax expense
28,600
Total expenses
383,600
Net income
$63,400
Outdoor Supply had no noncash investing and financingtransactions during 2016. During theâ year, there were no sales ofland orâ equipment, no payment of notesâ payable, no retirementsofâ stock, and no treasury stock transactions.
Requirements 1. Prepare the 2016 statement of cashâ flows,formatting operating activities by using the indirect method.
2. How will what you learned in this problem help you evaluateanâ investment?
(a) learn how operating activities, investing activities, andfinancing activities generate cash receipts and cash payments
(b) learn how companies prepare the statement of cash flows inorder to understand the meaning of cash flows from the 3 basiccategories of business activities
(c) both A and B
(d) none of the above
The 2016 and 2015 comparative balance sheets and 2016 incomestatement of Outdoor Supply Corp.â follow:
Outdoor Supply Corp. | ||||
Comparative Balance Sheets | ||||
December 31, | Increase | |||
2016 | 2015 | (Decrease) | ||
Current assets: | ||||
Cash and cash equivalents | $65,300 | $5,000 | $60,300 | |
Accounts receivable | 47,700 | 42,500 | 5,200 | |
Inventories | 58,600 | 57,400 | 1,200 | |
Prepaid expenses | 1,700 | 4,800 | (3,100) | |
Plant assets: | ||||
Land | 59,000 | 21,900 | 37,100 | |
Equipment, net | 53,700 | 49,400 | 4,300 | |
Total assets | $286,000 | $181,000 | $105,000 | |
Current liabilities: | ||||
Accounts payable | $35,200 | $27,800 | $7,400 | |
Salary payable | 26,000 | 15,100 | 10,900 | |
Other accrued liabilities | 20,600 | 23,700 | (3,100) | |
Long-term liabilities: | ||||
Notes payable | 65,000 | 35,000 | 30,000 | |
Stockholders' equity: | ||||
Common stock, no-par | 89,100 | 66,400 | 22,700 | |
Retained earnings | 50,100 | 13,000 | 37,100 | |
Total liabilities and stockholders' equity | $286,000 | $181,000 | $105,000 |
Outdoor Supply Corp. | ||||
Income Statement | ||||
Year Ended December 31, 2016 | ||||
Revenues: | ||||
Sales revenue | $447,000 | |||
Expenses: | ||||
Cost of goods sold | $187,000 | |||
Salary expense | 76,200 | |||
Depreciation expense | 17,400 | |||
Other operating expense | 49,700 | |||
Interest expense | 24,700 | |||
Income tax expense | 28,600 | |||
Total expenses | 383,600 | |||
Net income | $63,400 |
Outdoor Supply had no noncash investing and financingtransactions during 2016. During theâ year, there were no sales ofland orâ equipment, no payment of notesâ payable, no retirementsofâ stock, and no treasury stock transactions.
Requirements 1. Prepare the 2016 statement of cashâ flows,formatting operating activities by using the indirect method.
2. How will what you learned in this problem help you evaluateanâ investment?
(a) learn how operating activities, investing activities, andfinancing activities generate cash receipts and cash payments
(b) learn how companies prepare the statement of cash flows inorder to understand the meaning of cash flows from the 3 basiccategories of business activities
(c) both A and B
(d) none of the above