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 | $ | 83,000 | $ | 59,600 |
Accounts receivable | 614,000 | 640,000 | ||
Inventory | 622,400 | 432,000 | ||
Prepaid expenses | 19,600 | 11,000 | ||
Total current assets | 1,339,000 | 1,142,600 | ||
Property, plant, and equipment | 2,430,000 | 1,848,000 | ||
Less accumulated depreciation | 629,400 | 570,800 | ||
Net property, plant, and equipment | 1,800,600 | 1,277,200 | ||
Long-term investments | 105,200 | 166,000 | ||
Loans to subsidiaries | 132,000 | 76,000 | ||
Total assets | $ | 3,376,800 | $ | 2,661,800 |
Liabilities and Stockholders' Equity | ||||
Current liabilities | ||||
Accounts payable | $ | 889,200 | $ | 582,000 |
Accrued liabilities | 32,200 | 52,800 | ||
Income taxes payable | 148,600 | 127,600 | ||
Total current liabilities | 1,070,000 | 762,400 | ||
Bonds payable | 680,000 | 436,000 | ||
Total liabilities | 1,750,000 | 1,198,400 | ||
Stockholders equity: | ||||
Common stock | 1,114,000 | 1,012,000 | ||
Retained earnings | 512,800 | 451,400 | ||
Total stockholders equity | 1,626,800 | 1,463,400 | ||
Total liabilities and stockholders' equity | $ | 3,376,800 | $ | 2,661,800 |
The following additional information is available about the companys activities during this year:
- The company declared and paid a cash dividend this year.
-
Bonds with a principal balance of $392,000 were repaid during this year.
-
Equipment was sold during this year for $76,000. The equipment had cost $154,000 and had $54,400 in accumulated depreciation on the date of sale.
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Long-term investments were sold during the year for $134,000. These investments had cost $60,800 when purchased several years ago.
-
The subsidiaries did not repay any outstanding loans during the year.
-
Lomax did not repurchase any of its own stock during the year.
The company reported net income this year as follows:
Sales | $ | 3,240,000 | ||||
Cost of goods sold | 2,008,800 | |||||
Gross margin | 1,231,200 | |||||
Selling and administrative expenses | 993,600 | |||||
Net operating income | 237,600 | |||||
Nonoperating items: | ||||||
Gain on sale of investments | $ | 73,200 | ||||
Loss on sale of equipment | (23,600 | ) | 49,600 | |||
Income before taxes | 287,200 | |||||
Income taxes | 92,000 | |||||
Net income | $ | 195,200 | ||||
Required:
Using the indirect method, prepare a statement of cash flows for this year. (List any deduction in cash outflows as negative amounts.)
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