I need help with the assessment below. I cannot figure it out for he life of me. Help with these parts below would be greatly appreciated! Preparing statement of cash flow (Preparation and Analysis of Statement of Cash Flows) Here are the financial statements of Falcon Company. Falcon Company Comparative Balance Sheets December 31, 2016 Assets 2016 2015 Cash $13,000 $16,500 Accounts receivable 14,000 7,000 Merchandise inventory 19,000 12,500 Property, plant, and equipment $35,000 $39,000 Less: Accumulated depreciation (13,500) 21,500 (12,000) 27,000 Total $67,500 $63,000 Liabilities and Stockholdersâ Equity Accounts payable $15,500 $21,500 Income taxes payable 13,000 10,000 Bonds payable 10,000 5,000 Common stock 12,500 12,500 Retained earnings 16,500 14,000 Total $67,500 $63,000 Falcon Company Income Statement For the Year Ended December 31, 2016 Sales $143,000 Cost of goods sold 97,000 Gross profit 46,000 Selling expenses $14,000 Administrative expenses 4,500 18,500 Income from operations 27,500 Interest expense 3,500 Income before income taxes 24,000 Income tax expense 3,500 Net income $20,500 Additional data: 1. Dividends of $18,000 were declared and paid. 2. During the year equipment was sold for 5,000 cash. This equipment originally cost 7,500, and it had a book value of 5,000 at the time of sale. 3. All depreciation expense, 4,000, is in the sellling expense catagory. 4. All sales and purchases are on account. 5. Additional equipment was purchased for 3,500 cash. Instructions:
(a) Prepare a statement of cash flows using the indirect method. (b)(1) Compute the current cash debt coverage ratio. (b)(2) Compute the cash debt coverage ratio. (b)(3) Compute the free cash flow.
| I need help with the assessment below. I cannot figure it out for he life of me. Help with these parts below would be greatly appreciated! | |||||||
| Preparing statement of cash flow | |||||||
| (Preparation and Analysis of Statement of Cash Flows) Here are the financial statements of Falcon Company. | |||||||
| Falcon Company | |||||||
| Comparative Balance Sheets | |||||||
| December 31, 2016 | |||||||
| Assets | 2016 | 2015 | |||||
| Cash | $13,000 | $16,500 | |||||
| Accounts receivable | 14,000 | 7,000 | |||||
| Merchandise inventory | 19,000 | 12,500 | |||||
| Property, plant, and equipment | $35,000 | $39,000 | |||||
| Less: Accumulated depreciation | (13,500) | 21,500 | (12,000) | 27,000 | |||
| Total | $67,500 | $63,000 | |||||
| Liabilities and Stockholdersâ Equity | |||||||
| Accounts payable | $15,500 | $21,500 | |||||
| Income taxes payable | 13,000 | 10,000 | |||||
| Bonds payable | 10,000 | 5,000 | |||||
| Common stock | 12,500 | 12,500 | |||||
| Retained earnings | 16,500 | 14,000 | |||||
| Total | $67,500 | $63,000 | |||||
| Falcon Company | |||||||
| Income Statement | |||||||
| For the Year Ended December 31, 2016 | |||||||
| Sales | $143,000 | ||||||
| Cost of goods sold | 97,000 | ||||||
| Gross profit | 46,000 | ||||||
| Selling expenses | $14,000 | ||||||
| Administrative expenses | 4,500 | 18,500 | |||||
| Income from operations | 27,500 | ||||||
| Interest expense | 3,500 | ||||||
| Income before income taxes | 24,000 | ||||||
| Income tax expense | 3,500 | ||||||
| Net income | $20,500 | ||||||
| Additional data: | |||||||
| 1. Dividends of | $18,000 | were declared and paid. | |||||
| 2. During the year equipment was sold for 5,000 cash. This equipment originally cost 7,500, and it had a book value of 5,000 at the time of sale. | |||||||
| 3. All depreciation expense, 4,000, is in the sellling expense catagory. | |||||||
| 4. All sales and purchases are on account. | |||||||
| 5. Additional equipment was purchased for 3,500 cash. | |||||||
| Instructions: | |||||||
| (a) Prepare a statement of cash flows using the indirect method. | |||||||
| (b)(1) Compute the current cash debt coverage ratio. | |||||||
| (b)(2) Compute the cash debt coverage ratio. | |||||||
| (b)(3) Compute the free cash flow. | |||||||
Related questions
Paulee Corporation paid $24,800 for an 80% interest in SergioCorporation on January 1, 2015, at which time Sergio'sstockholders' equity consisted of $15,000 of Common Stock and$6,000 of Retained Earnings. The fair values of SergioCorporation's assets and liabilities were identical to reorded bookvalues when Paulee acquired its 80% interest.
Sergio Corporation reported net income of $4,000 and paiddividends of $2,000 during 2015. Paulee Corporation sold inventoryitems to Sergio during 2015 and 2016 as follows:
| 2015 | 2016 | |
| Paulee's sales to Sergio | $5,000 | $6,000 |
| Paulee's cost of sales to Serigo | 3,000 | 3,500 |
| Unrealized profit at year-end | 1,000 | 1,500 |
At December 31, 2016, the accounts payable of Sergio include$1,500 owed to Paulee for inventory purchases.
Financial statements of Paulee and Sergio appear in the firsttwo columns of the partially completed working papers.
REQUIRED:
1. Show all preliminary computations (5 pts)
2. Complete the consolidation working papers for PauleeCorporation and Subsidiary for the year ended December 31, 2016 (13pts)
3. Give all eliminating journal entires (6 pts)
| Paulee | Sergio | Eliminations- Debit | Eliminations- Credit | Non-Cont. Interest | Consolidated | |
| INCOME STATEMENT Sales | $43,000 | $20,000 | ||||
| Income from Sergio | 6,700 | |||||
| Cost of Sales | (22,000) | (8,000) | ||||
| Other expenses Non-controlling interest Expense | (12,200) | (3,000) | ||||
| Net Income | 15,500 | 9,000 | ||||
| RETAINED EARNINGS Retained Earnings 1/1 | 9,000 | 8,000 | ||||
| Add: Net Income | 15,500 | 9,000 | ||||
| Less: Dividends | (10,000) | (5,000) | ||||
| Retained Earnings 12/31 | $14,500 | $12,000 | ||||
| BALANCE SHEET Cash | 5,400 | 3,000 | ||||
| Accounts Receivable- Net | 14,000 | 10,000 | ||||
| Dividend Receivable | 2,000 | |||||
| Inventories | 18,000 | 8,000 | ||||
| Goodwill | ||||||
| Equipment and Buildings- Net | 24,000 | 31,000 | ||||
| Investment in Sergio | 28,100 | |||||
| TOTAL ASSETS | $91,500 | $52,000 | ||||
| LIAB. & EQUITY Accounts payable | 17,500 | 12,500 | ||||
| Dividend payable | 7,000 | 2,500 | ||||
| Other Debt | 12,500 | 10,000 | ||||
| Capital Stock | 40,000 | 15,000 | ||||
| Retained Earnings | 14,500 | 12,000 | ||||
| 1/1 Noncontrl Interest | ||||||
| 12/31 Noncontrl Interest | ||||||
| LIAB. & EQUITY | $91,500 | $52,000 |
Statement of Cash Flows (Indirect Method) The Towne Companyâs income statement and comparative balance sheets as of December 31 of 2016 and 2015 follow:
| TOWNE COMPANY Income Statement For the Year Ended December 31, 2016 | ||
|---|---|---|
| Service Fees Earned | $317,000 | |
| Dividend and Interest Income | 14,000 | |
| $331,000 | ||
| Wages and Other Operating Expenses | $285,000 | |
| Depreciation Expense | 55,000 | |
| Franchise Amortization Expense | 10,000 | |
| Loss on Sale of Equipment | 7,000 | |
| Gain on Sale of Investments | (17,000) | 340,000 |
| Net Loss | $(9,000) | |
| TOWNE COMPANY Balance Sheets | ||
|---|---|---|
| Dec. 31, 2016 | Dec. 31, 2015 | |
| Assets | ||
| Cash | $43,000 | $33,000 |
| Accounts Receivable | 13,000 | 18,000 |
| Interest Receivable | - | 4,000 |
| Prepaid Expenses | 16,000 | 10,000 |
| Long-term InvestmentsâAvailable for Sale | - | 70,000 |
| Fair Value Adjustment to Investments | - | 10,000 |
| Plant Assets | 696,000 | 655,000 |
| Accumulated Depreciation | (237,000) | (185,000) |
| Franchise | 91,000 | 29,000 |
| Total Assets | $622,000 | $644,000 |
| Liabilities and Stockholdersâ Equity | ||
| Accrued Liabilities | $12,000 | $14,000 |
| Notes Payable | - | 26,000 |
| Common Stock ($10 par value) | 595,000 | 535,000 |
| Retained Earnings | 35,000 | 59,000 |
| Unrealized Gain on Investments | - | 10,000 |
| Treasury Stock | (20,000) | - |
| Total Liabilities and Stockholdersâ Equity | $622,000 | $644,000 |
During the year, the following transactions occurred:
1. Sold equipment for $9,000 cash that originally cost $19,000 and had $3,000 accumulated depreciation.
2. Sold longâterm investments that had cost $70,000 for $87,000 cash. Unrealized gains totaling $10,000 related to these investments had been recorded in earlier years. At yearâend, the fair value adjustment and unrealized gain account balances were eliminated.
3. Paid cash to extend the companyâs exclusive franchise for another three years.
4. Paid off a note payable at the bank on January 1.
5. Declared and paid a $15,000 dividend.
6. Purchased treasury stock for cash.
7. Acquired land valued at $60,000 by issuing 6,000 shares of common stock.
Required
a. Compute the change in cash that occurred in 2016.
b. Prepare a statement of cash flows using the indirect method.
a. Change in Cash during 2016 $Answer AnswerIncreaseDecrease
b. Use a negative sign with cash outflow answers.
| TOWNE COMPANY Statement of Cash Flows For Year Ended December 31, 2016 | ||
|---|---|---|
| Cash Flow from Operating Activities | ||
| Net Loss | $Answer | |
| Add (deduct) items to convert net income to cash basis | ||
| Depreciation | Answer | |
| Franchise Amortization | Answer | |
| Loss on Sale of Equipment | Answer | |
| Gain on Sale of Investments | Answer | |
| Accounts Receivable | AnswerIncreaseDecrease | Answer |
| Interest Receivable | AnswerIncreaseDecrease | Answer |
| Prepaid Expenses | AnswerIncreaseDecrease | Answer |
| Accrued Liabilities | AnswerIncreaseDecrease | Answer |
| Cash Provided by Operating Activities | Answer | |
| Cash Flow from Investing Activities | ||
| Sale of Equipment | Answer | |
| Sale of Investments | Answer | |
| Extension of Franchise | Answer | |
| Cash Provided by Investing Activities | Answer | |
| Cash Flow from Financing Activities | ||
| Payment of Notes Payable | Answer | |
| Payment of Dividends | Answer | |
| Purchase of Treasury Stock | Answer | |
| Cash Used by Financing Activities | Answer | |
| Net in Cash AnswerIncreaseDecrease | Answer | |
| Cash at Beginning of Year | Answer | |
| Cash at End of Year | $Answer | |
| Devin E Corporation | |||
| Balance Sheet | |||
| As of December 31, | |||
| 2015 | 2014 | ||
| Assets: | |||
| Cash & Cash Equivalents | $41,900 | $25,000 | |
| Accounts Receivable | 24,000 | 6,250 | |
| Inventory | 30,000 | 36,000 | |
| CurrentAssets | 95,900 | 67,250 | |
| Land | 25,000 | 10,000 | |
| Equipment | 42,000 | 38,500 | |
| Less: Accumulated Depreciation | (14,000) | (7,000) | |
| 53,000 | 41,500 | ||
| Total Assets | 148,900 | 108,750 | |
| Liabilities: | |||
| Accounts Payable | 17,500 | 22,500 | |
| Accrued Salaries Payable | 5,500 | 8,000 | |
| Rent Expense Payable | 2,200 | 1,000 | |
| Income Tax Payable | 6,900 | 4,000 | |
| Current Liabilities | 32,100 | 35,500 | |
| Long-term notes payable | 50,000 | 30,000 | |
| Total Liabilities | 82,100 | 65,500 | |
| Stockholders Equity: | |||
| Common Stock | 42,000 | 30,000 | |
| Retained Earnings | 24,800 | 13,250 | |
| Total Liabilities & StockholdersEquity | $148,900 | $108,750 | |
| Devin E Corporation | |||
| Income Statement | |||
| For the Year Ended December 31, 2015 | |||
| 2015 | |||
| Revenues | $147,000 | ||
| Cost of Goods Sold | 84,000 | ||
| Gross Profit | 63,000 | ||
| Operating Expenses | |||
| Depreciation Expense | 7,000 | ||
| Salary Expense | 14,600 | ||
| Insurance Expense | 2,500 | ||
| Rent Expense | 10,000 | ||
| Interest Expense | 4,200 | ||
| Total OperatingExpenses | 38,300 | ||
| Income from Operations | 24,700 | ||
| Income Tax Expense | 6,900 | ||
| Net Income | $17,800 | ||
| Devin E Corporation (theâCompanyâ) manufactures food processing equipment. Use DevinCorporationâs 2015 and 2014 balance sheets and 2015 incomestatement shown below to prepare a statement of cash flows for2015. Note that the Company paid dividends of $6,250 during2015. |
Please fill in the balance sheet as well as create a statementof cash flow sheet
| Devin E Corporation | ||||||||
| Balance Sheet | ||||||||
| 31-Dec | ||||||||
| Worksheet for Cash Flow | ||||||||
| 2015 | 2014 | Change | Cash | Operating | Investing | Financing | ||
| Cash and Cash Equivalents | ||||||||
| Accounts Receivable | ||||||||
| Inventory | ||||||||
| Land | ||||||||
| Equipment | ||||||||
| Accumulated Depreciation | ||||||||
| Accounts Payable | ||||||||
| Accrued Salaries Payable | ||||||||
| Rent Expense Payable | ||||||||
| Income Tax Payable | ||||||||
| Long-term Note Payable | ||||||||
| Common Stock | ||||||||
| Retained Earnings | ||||||||
| Devin E Corporation | ||
| Statement of Cash Flows | ||
| For the Year Ended December 31, 2015 | ||
