Line torowing intormabon apones to the questions displayed below Lansing Company's current year income statement and selected balance sheet data at December 31 of the current and prior years follow. LANSING COMPANY Income Statement For Current Year Ended December 31 Sales revenue $112,200 Expenses Cost of goods sold 47. Depreciation expense 14.See Salaries expense 23. Rent expense 9. See Insurance expense Interest expense 4,20 utilities expense Net income $ 6, See LANSING COMPANY Selected Balance Sheet Accounts At December 31 Current Year Accounts receivable $6.1 Inventory Accounts payable 4. Salaries payable Utilities payable Prepaid insurance Prepaid rent Prior Year $5. 2.4 1,2 5. Required: Prepare the operating activities section of the statement of cash flows using the indirect method for the current year. (Amounts to be deducted should be indicated with a minus sign.) LANSING COMPANY Cash Flows from Operating Activities-indirect Method For Current Year Ended December 31 Cash flows from operating activities A n ts to reconcile net income to cash provided by operations Forten Company's current year income statement, comparative balance sheets, and additional information follow. For the year, () all sales are credit sales. (2) all credits to Accounts Receivable reflect cash receipts from customers. (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. FORTEN COMPANY Comparative Balance Sheets December 31 Current Year Assets $ $87.50 20. 86.91e 296,655 265,80 42e.lee 122,000 455.816 143.580 ( 4525 $ 555.691 (53. $49. Accounts receivable Inventory Prepaid expenses Total current assets Equipment ACC. depreciation Equipment Total assets Liabilities and Equity Accounts payable Short-ters notes payable Total current liabilities Long-ters notes payable Total liabilities Equity Common stock, 55 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $67.141 $ 135,675 3. 81,341 52.750 139,341 183.250 58. See $ 652. See 353, See FORTEN COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses Depreciation expense $ 34,750 Other expenses 145.4ee Other gains (losses) LOSS on sale of equipment Income before taxes Income taxes expense Net Income 181,150 29125) 153,225 $ 109,375 Additional Information on Current Year Transactions a. The loss on the cash sale of equipment was $19,125 (details in b. b. Sold equipment costing $88,875, with accumulated depreciation of $44,125, for $25.625 cash c. Purchased equipment costing $110.375 by paying $58,000 cash and signing a long-term note payable for the balance. d. Borrowed $5.400 cash by signing a short-term note payable. e. Paid $57125 cash to reduce the long-term notes payable. . Issued 3.900 shares of common stock for $20 cash per share . Declared and paid cash dividends of $52.900.
1
2
2
3
3
4
4
5
5
