For the year ending December 31, 2007, Chippendale Systems Inc. reported net income of $48,320 and paid
Question:
Instructions
1. Prepare a statement of cash flows, using the indirect method.
2. Why is depreciation added to net income in determining net cash flows from operating activities?Explain.
Transcribed Image Text:
Chippendale Systems Inc. Balance Sheets December 31 Changes 2007 2006 Increase (Decrease) Assets Current assets: Cash Accounts receivable Merchandise inventory Office supplies Prepaid insurance 42,360 60,864 49,720 384 120 $155,448 33,200 41,600 47,760 480 2,400 9,160 19,264 1,960 (96) 280 $30,008 Total current assets $125,440 Property, plant, and equipment: Land Store equipment Accumulated depreciation-store equipment Office equipment 16,000 21,680 (4,560) 12,456 $16,000 16,000 (2,080) 8,000 5,680 (2,480) 4,456 Accumulated depreciation-office equipment 776) 84) 1992) 5,664 535,672 Total property, plant, and equipment 41,800 $197,248 $36,136 161,576 Total assets Liabilities Current liabilities: Accounts payable Notes payable (current portion) Salaries payable Unearned rent 17,936 4,000 912 1,440 24,288 $ 11,416 4,000 1,200 1,920 S18,536 6,520 0 (288) (480) S 5,752 Total current liabilities Long-term liabilities: 20,000 4,000) 1,752 Notes payable (final payment due 2012) 16,000 40,288 Total liabilities 38,536 Stockholders Equity Capital stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity S 20,000 136,960 $156,960 20,000 103,040 33,920 533,920 5161,576 35,672 123,040 $197 248
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 66% (12 reviews)
1 CHIPPENDALE SYSTEMS INC Statement of Cash Flows For the Year Ended December 31 2007 Cash flows fro...View the full answer
Answered By
Joram mutua
I am that writer who gives his best for my student/client. Anything i do, i give my best. I have tutored for the last five years and non of my student has ever failed, they all come back thanking me for the best grades. I have a degree in economics, but i have written academic papers for various disciplines due to top-notch research Skills.In additional, I am a professional copywriter and proofreader.
5.00+
2+ Reviews
10+ Question Solved
Related Book For
Financial Accounting An Integrated Statements Approach
ISBN: 978-0324312119
2nd Edition
Authors: Jonathan E. Duchac, James M. Reeve, Carl S. Warren
Question Posted:
Students also viewed these Accounting questions
-
Prepare a statement of cash lows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the...
-
Prepare a statement of cash flows using the indirect method. The income statement for 2017 and the balance sheets for 2017 and 2016 are presented for Harding Industries, Inc. Additional information...
-
Prepare a statement of cash flows using the indirect method for the ABC Co for the year 2012. ABC Co. Balance Sheet 1/1/2012 12/31/2012 Increase/(Decrease) Cash 700,000 840,000 140,000 Marketable...
-
Use the search feature on your favorite business news site on the Web (e.g., CNN, Bloomberg, or Fox News) and search for news on partnerships, LLCs, or limited partnerships. What entities did you...
-
LaTasha Nabors and Chelsey Rollins decide to form a partnership by combining the assets of their separate businesses. Nabors contributes the following assets to the partnership: cash, $24,000;...
-
Away Corp. has interest-bearing debt with a market value of $55 million. The company also has 1.6 million shares that sell for $43 per share.What is the debt-equity ratio for this company based on...
-
Is securitisation something to do with anti-criminal precautions? If not, explain what it is and why firms do it.
-
1. Which of the following is not a component of aggregate demand? a. Consumption b. Investment c. Government expenditures d. The supply of money e. Net exports 2. In the Great Depression, prices in...
-
Case 3 (25 points) Dew Corporation has the following data, in thousands. Assume a 365-day year. Annual sales = Annual cost of goods sold = 45,000 31,500 Average Inventory = 4,000 Average Accounts...
-
Thumbtacks March 31, 2012, budgeted balance sheet follows: The budget committee of Thumbtack Office Supply has assembled the following data. a. Sales in April were $40,000. You forecast that monthly...
-
The following selected transactions were completed during June between Schnaps Company and Brandy Company: June 2 Schnaps Company sold merchandise on account to Brandy Company, $14,000, terms FOB...
-
The following selected accounts and their current balances appear in the ledger of Sciatic Co. for the fiscal year ended July 31, 2006: Instructions 1. Prepare a multiple-step income statement. 2....
-
Park Co. is considering an investment that requires immediate payment of $27,000 and provides expected cash inflows of $9,000 annually for four years. Assume Park Co. requires a 10% return on its...
-
The Willson Company starts operations in Year One. It makes sales of $600,000 in Year One and $800,000 in Year Two. Cash of $440,000 is collected in Year One while $600,000 is collected in Year Two....
-
A baseball player wants to know the minimum angle to hit a line drive over a 1 1 . 5 feet fence in left field ( 3 6 8 ft away ) . What is this angle?
-
KN Jewelers purchased some land four years ago at a cost of $218,001. They spent $45,000 to raze the old building and clear the lot. Today, the lot is valued at $237,000 and produces an annual income...
-
Draw a class diagram using the following scenario below without considering any design patterns. Show the associations between the classes with navigability and multiplicity. Show the attributes and...
-
Link Manufacturing produces bicycle chains and has developed forecasts of sales as illustrated in the table below. Link would like to use a level production plan which never allows back orders to...
-
Riverside Memorials primary financial statements are presented in exhibits 17.1, 17.2, and 17.3. a. Calculate Riversides financial ratios for 2019. Assume that Riverside had $1,000,000 in lease...
-
Huntingdon Capital Corp. is a competitor of Plazacorp and First Capital Realty. Huntingdon reported the following selected information (in millions):...
-
What are the two dimensions of the retail positioning matrix?
-
Zeidman Security Services Co offers security services to business clients. The trial balance for Zeidman Security Services Co. has been prepared on the end-of-period spreadsheet (work sheet) for the...
-
Zediman Security Services Co. offers security services to business clients. Complete the following end-of-period spreadsheet (work sheet) for Zeidman Security ServicesCo. Zeidman Security Services...
-
Based on the data in Exercise 4-25, prepare an income statement, retained earnings statement, and balance sheet for Zeidman Security Services Co.
-
Company I issued R100 par value bonds with a coupon rate of 15% which will mature in 10 years' time. The YTM on the bonds are 11%. What would the bond sell for in the present? Choose the most correct...
-
Property C has two partners, Operator and Finance Property C has a single tenant and NOI of $15 million in year one. The building is purchased for cash at a cap rate of 6%. The operator invests 15%...
-
Problem 6-30 Calculating Project NPV Calligraphy Pens is deciding when to replace its old machine. The machine's current salvage value is $3,000,000. Its current book value is $1,775,000. If not...
Study smarter with the SolutionInn App