ACCT 2220 Study Guide - Final Guide: Cash Flow Statement, Cash Cash, Retained Earnings

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6 Jun 2013

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The set of financial reports for a company include: the balance sheet: a list at a point in time, of the companies assets, liabilities, and owners" equity. Generally prepared once a year: the income statement: during the normal course of trade over a year, the company will probably engage in many transaction that affect the owners" equity. Every time a sale is made or every time an expense is incurred, the owners" equity either rises or falls. The income statement summarizes all these transactions over a one-year reporting period and reports on their overall effect: the statement of retained earnings: a comparatively short statement that helps link the balance sheet and the income statement. One of the items on the balance sheet of any company is retained earnings. : the cash flow statement: supplements the balance sheet and the income statement. It reports the various sources of cash and the various uses of cash.

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Help! I have tried and tried and can't figure this one out!

Use the data from the following financial statements.

The company paid interest expense of $18,300 for 2014 and had anoverall tax rate of 40% for 2014. Complete the statement ofretained earnings for? 2014, and determine the dividends paid lastyear.

1) The distributed earnings is ?$ _________ <<< How onearth do I figure this out.

Partial Income Statment Year Ending 2014
Sales Revenue	$349,800
Cost of good sold	$141,900
Fixed Cost	$43,200
Selling, general, and administrative expense	$28100
Depreciation	$46, 200

Patial Balance Sheet 12/31/2013
Assests		Liabilities
Cash	$16100	Notes Payable	$14,200
Accounts Receivable	$28,200	Accounts Payable	$18900
Inventories	$48,100	Long Term Debt	$190,200
Fixed Assets	$367,900	Owners Quity
Accumulated Depreciation	$140,700	Retained Earnings
Intangible Assets	$81,900	Common Stock	132,000

Partial Balance Sheet 12/31/2014
Assets		Liabilities
Cash	$26,000	Notes Payable	$11,900
Accounts Receivable	$18900	Account Payable	$24,000
Inventories	$53,100	Long term Debt	$161800
Fixed Assets	$446,800	Owners Equity
Accumulated depreciation		Retained earnings
Intangible assets	$82,200	Common Stock	$182,000

PROBLEM 14-12 Prepare a statement of Cash Flows (L014-1, L014-2] A comparative balance sheet and an income statement for Burgess Company are given below: Burgess Company Comparative Balance Sheet (dollars in millions) Ending Balance Beginning Balance $ 79 580 5 $ 49 645 660 1,354 1,515 765 750 $2,104 466 1 $2,099 Assets Current assets: Cash and cash equivalents ... Accounts receivable Inventory Total current assets ........... Property, plant, and equipment. Less accumulated depreciation .. Net property, plant, and equipment.... Total assets ..... Liabilities and Stockholders' Equity Current liabilities: Accounts payable ... Accrued liabilities ........... Income taxes payable ......... Total current liabilities. Bonds payable............ Total liabilities ............ Stockholders' equity: Common stock Retained earnings ... Total stockholders' equity ........... Total liabilities and stockholders' equity ..... $ 250 $ 155 165 151 010 161 161 1,089 $2,099 Burgess Company Income Statement (dollars in millions) Net sales ....... Cost of goods sold ...... Gross margin Selling and administrative expenses ...... Net operating income ... Nonoperating items: Gain on sale of equipment .... Income before taxes... Income taxes ........................... Net income ................................ $3,600 2,550 1,050 875 175 115 Burgess also provided the following information: 1. The company sold equipment that had an original cost of $13 million and accumulated depre- ciation of $8 million. The cash proceeds from the sale were $8 million. The gain on the sale was $3 million 2. The company did not issue any new bonds during the year. 3. The company paid a cash dividend during the year. 4. The company did not complete any common stock transactions during the year. Required: 1. Using the indirect method, prepare a statement of cash flows for the year. 2. Assume that Burgess had sales of $3,800, net income of $135, and net cash provided by oper ating activities of $150 in the prior year (all numbers are stated in millions). Prepare a memo that summarizes your interpretations of Burgess's financial performance.

Walmouth Corporation's comparative balance sheet and income statement for last year appear below:

Comparative Balance Sheet
	Ending Balance	Beginning Balance
Cash	$40,000	$32,000
Accounts receivable	89,000	79,000
Inventory	48,000	55,000
Prepaid expenses	8,000	11,000
Long-term investments	250,000	210,000
Property, plant and equipment	550,000	550,000
Less accumulated depreciation	264,000	239,000
Total assets	$721,000	$698,000
Accounts payable	$58,000	$46,000
Accrued liabilities	15,000	19,000
Income taxes payable	55,000	41,000
Bonds payable	100,000	160,000
Common stock	150,000	140,000
Retained earnings	343,000	292,000
Total liabilities and stockholders' equity	$721,000	$698,000

Income Statement
Sales	$870,000
Cost of goods sold	450,000
Gross margin	420,000
Selling and administrative expense	270,000
Net operating income	150,000
Income taxes	45,000
Net income	$105,000

The company declared and paid a cash dividend of $54,000 during the year. It did not purchase or dispose of any property, plant, and equipment. It did not issue any bonds or repurchase any of its own common stock. The following questions pertain to the company's statement of cash flows.

The net cash provided by (used in) operating activities last year was:

		$58,000
		$130,000
		$152,000
		$105,000

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ACCT 2220 Study Guide - Final Guide: Cash Flow Statement, Cash Cash, Retained Earnings

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