ACC 311 Chapter Notes - Chapter Appendix A: Cash Flow Statement
Get access
Related Documents
Related Questions
Pronghorn Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
PRONGHORN INC. | ||||||
12/31/17 | 12/31/16 | |||||
Cash | $6,100 | $6,900 | ||||
Accounts receivable | 62,500 | 51,000 | ||||
Short-term debt investments (available-for-sale) | 34,800 | 18,100 | ||||
Inventory | 39,600 | 60,200 | ||||
Prepaid rent | 4,900 | 4,000 | ||||
Equipment | 154,500 | 130,100 | ||||
Accumulated depreciationâequipment | (34,800 | ) | (25,300 | ) | ||
Copyrights | 46,300 | 50,400 | ||||
Total assets | $313,900 | $295,400 | ||||
Accounts payable | $46,000 | $40,200 | ||||
Income taxes payable | 4,000 | 6,000 | ||||
Salaries and wages payable | 8,100 | 4,000 | ||||
Short-term loans payable | 8,000 | 10,000 | ||||
Long-term loans payable | 59,700 | 69,000 | ||||
Common stock, $10 par | 100,000 | 100,000 | ||||
Contributed capital, common stock | 30,000 | 30,000 | ||||
Retained earnings | 58,100 | 36,200 | ||||
Total liabilities & stockholdersâ equity | $313,900 | $295,400 |
PRONGHORN INC. | ||||
Sales revenue | $339,075 | |||
Cost of goods sold | 175,000 | |||
Gross profit | 164,075 | |||
Operating expenses | 119,900 | |||
Operating income | 44,175 | |||
Interest expense | $11,300 | |||
Gain on sale of equipment | 2,000 | 9,300 | ||
Income before tax | 34,875 | |||
Income tax expense | 6,975 | |||
Net income | $27,900 |
Additional information:
1. | Dividends in the amount of $6,000 were declared and paid during 2017. | |
2. | Depreciation expense and amortization expense are included in operating expenses. | |
3. | No unrealized gains or losses have occurred on the investments during the year. | |
4. | Equipment that had a cost of $19,900 and was 70% depreciated was sold during 2017. |
Prepare a statement of cash flows using the indirect method.
Required information
[The following information applies to the questions displayed below.]
Comparative financial statements for Weaver Company follow:
Weaver Company Comparative Balance Sheet at December 31 | ||||||||
This Year | Last Year | |||||||
Assets | ||||||||
Cash | $ | 2 | $ | 12 | ||||
Accounts receivable | 308 | 230 | ||||||
Inventory | 157 | 194 | ||||||
Prepaid expenses | 9 | 5 | ||||||
Total current assets | 476 | 441 | ||||||
Property, plant, and equipment | 514 | 436 | ||||||
Less accumulated depreciation | (86 | ) | (72 | ) | ||||
Net property, plant, and equipment | 428 | 364 | ||||||
Long-term investments | 26 | 32 | ||||||
Total assets | $ | 930 | $ | 837 | ||||
Liabilities and Stockholders' Equity | ||||||||
Accounts payable | $ | 302 | $ | 225 | ||||
Accrued liabilities | 73 | 77 | ||||||
Income taxes payable | 71 | 65 | ||||||
Total current liabilities | 446 | 367 | ||||||
Bonds payable | 195 | 172 | ||||||
Total liabilities | 641 | 539 | ||||||
Common stock | 162 | 201 | ||||||
Retained earnings | 127 | 97 | ||||||
Total stockholdersâ equity | 289 | 298 | ||||||
Total liabilities and stockholders' equity | $ | 930 | $ | 837 | ||||
Weaver Company Income Statement For This Year Ended December 31 | ||||||
Sales | $ | 753 | ||||
Cost of goods sold | 445 | |||||
Gross margin | 308 | |||||
Selling and administrative expenses | 222 | |||||
Net operating income | 86 | |||||
Nonoperating items: | ||||||
Gain on sale of investments | $ | 7 | ||||
Loss on sale of equipment | (1 | ) | 6 | |||
Income before taxes | 92 | |||||
Income taxes | 23 | |||||
Net income | $ | 69 | ||||
During this year, Weaver sold some equipment for $19 that had cost $30 and on which there was accumulated depreciation of $10. In addition, the company sold long-term investments for $13 that had cost $6 when purchased several years ago. Weaver paid a cash dividend this year and the company repurchased $39 of its own stock. This year Weaver did not retire any bonds.
Required:
1. Using the indirect method, determine the net cash provided by/used in operating activities for this year. Please provide the whole Statement of Cash Flows (using Indirect Method) for Weaver Company.