Michaels Company had available at the end of 2014 the information shown on the next page. Instructions
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Instructions
Prepare a statement of cash flows for Michaels Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are classified as available-for-sale?
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MICHAELS COMPANY COMPARATIVE BALANCE SHEETS As OF DECEMBER 31, 2014 AND 2013 2014 2013 $ 10,000 20,500 $ 4,000 12,950 30,000 35,000 12,000 Cash Accounts receivable Short-term investments 22,000 42,000 3,000 2,100 Inventory Prepaid rent Prepaid insurance Supplies Land 900 1,000 125,000 350,000 (105,000) 525,000 (130,000) 45,000 750 175,000 350,000 (87,500) 400,000 (112,000) 50,000 Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Patents $910,600 $871,100 Total assets $ 22,000 5,000 5,000 10,000 $ 32,000 4,000 3,000 10,000 70,000 400,000 25,853 220,000 Accounts payable Income taxes payable Salaries and wages payable Short-term notes payable Long-term notes payable Bonds payable Premium on bonds payable Common stock 60,000 400,000 20,303 240,000 Paid-in capital in excess of par-common stock Retained earnings 25,000 123,297 17,500 88,747 Total liabilities and stockholders' equity $910,600 $871,100 MICHAELS COMPANY INCOME STATEMENT AND DIVIDEND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2014 $1,160,000 748,000 Sales revenue Cost of goods sold 412,000 Gross margin Operating expenses Selling expenses Administrative expenses $ 79,200 156,700 Depreciation/Amortization expense Total operating expenses 40,500 276,400 Income from operations Other revenues/expenses 135,600 Gain on sale of land 8,000 4,000 2,400 Gain on sale of short-term investment Dividend revenue Interest expense (51,750) (37,350) Income before taxes 98,250 39,400 Income tax expense Net income 58,850 (24,300) Dividends to common stockholders To retained earnings 34,550
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MICHAELS COMPANY Statement of Cash Flows For the Year Ended December 31 2014 Direct Method Cash flows from operating activities Cash receipts Cash rec...View the full answer
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Related Book For
Intermediate Accounting 2014 FASB Update
ISBN: 978-1118147290
15th edition
Authors: Donald E. Kieso, Jerry J. Weygandt, Terry D. Warfield
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