Question
A comparative balance sheet for Lomax Company containing data for the last two years is as follows: Lomax Company Comparative Balance Sheet This Year Last
A comparative balance sheet for Lomax Company containing data for the last two years is as follows: Lomax Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash and cash equivalents $ 92,000 $ 66,800 Accounts receivable 632,000 662,500 Inventory 633,200 441,000 Prepaid expenses 26,800 15,500 Total current assets 1,384,000 1,185,800 Property, plant, and equipment 2,475,000 1,884,000 Less accumulated depreciation 640,200 578,900 Net property, plant, and equipment 1,834,800 1,305,100 Long-term investments 124,100 193,000 Loans to subsidiaries 141,000 80,500 Total assets $ 3,483,900 $ 2,764,400 Liabilities and Stockholders' Equity Current liabilities Accounts payable $ 903,600 $ 591,000 Accrued liabilities 37,600 60,900 Income taxes payable 160,300 134,800 Total current liabilities 1,101,500 786,700 Bonds payable 725,000 463,000 Total liabilities 1,826,500 1,249,700 Stockholders equity: Common stock 1,132,000 1,021,000 Retained earnings 525,400 493,700 Total stockholders equity 1,657,400 1,514,700 Total liabilities and stockholders' equity $ 3,483,900 $ 2,764,400 The following additional information is available about the companys activities during this year: a. The company declared and paid a cash dividend this year. b. Bonds with a principal balance of $401,000 were repaid during this year. c. Equipment was sold during this year for $80,500. The equipment had cost $172,000 and had $65,200 in accumulated depreciation on the date of sale. d. Long-term investments were sold during the year for $152,000. These investments had cost $68,900 when purchased several years ago. e. The subsidiaries did not repay any outstanding loans during the year. f. Lomax did not repurchase any of its own stock during the year. The company reported net income this year as follows: Sales $ 3,420,000 Cost of goods sold 2,120,400 Gross margin 1,299,600 Selling and administrative expenses 1,041,300 Net operating income 258,300 Nonoperating items: Gain on sale of investments $ 83,100 Loss on sale of equipment (26,300) 56,800 Income before taxes 315,100 Income taxes 101,000 Net income $ 214,100 Required: 1. Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash and cash outflows as negative amounts.)
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