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 | $ | 95,000 | $ | 69,200 |
Accounts receivable | 638,000 | 670,000 | ||
Inventory | 636,800 | 444,000 | ||
Prepaid expenses | 29,200 | 17,000 | ||
Total current assets | 1,399,000 | 1,200,200 | ||
Property, plant, and equipment | 2,490,000 | 1,896,000 | ||
Less accumulated depreciation | 643,800 | 581,600 | ||
Net property, plant, and equipment | 1,846,200 | 1,314,400 | ||
Long-term investments | 130,400 | 202,000 | ||
Loans to subsidiaries | 144,000 | 82,000 | ||
Total assets | $ | 3,519,600 | $ | 2,798,600 |
Liabilities and Stockholders' Equity | ||||
Current liabilities | ||||
Accounts payable | $ | 908,400 | $ | 594,000 |
Accrued liabilities | 39,400 | 63,600 | ||
Income taxes payable | 164,200 | 137,200 | ||
Total current liabilities | 1,112,000 | 794,800 | ||
Bonds payable | 740,000 | 472,000 | ||
Total liabilities | 1,852,000 | 1,266,800 | ||
Stockholders equity: | ||||
Common stock | 1,138,000 | 1,024,000 | ||
Retained earnings | 529,600 | 507,800 | ||
Total stockholders equity | 1,667,600 | 1,531,800 | ||
Total liabilities and stockholders' equity | $ | 3,519,600 | $ | 2,798,600 |
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 $404,000 were repaid during this year. |
c. | Equipment was sold during this year for $82,000. The equipment had cost $178,000 and had $68,800 in accumulated depreciation on the date of sale. |
d. | Long-term investments were sold during the year for $158,000. These investments had cost $71,600 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 | $ | 3,480,000 | ||
Cost of goods sold | 2,157,600 | |||
Gross margin | 1,322,400 | |||
Selling and administrative expenses | 1,057,200 | |||
Net operating income | 265,200 | |||
Nonoperating items: | ||||
Gain on sale of investments | $ | 86,400 | ||
Loss on sale of equipment | 27,200 | 59,200 | ||
Income before taxes | 324,400 | |||
Income taxes | 104,000 | |||
Net income | $ | 220,400 | ||
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.) Lomax Company Statements Of Cash Flows 1. Operating activities 2. 3. Adjustments to convert net income to cash basis 4. 5. 6. 7. 8. 9. 10. 11. 12 13. 14. 15. Investing activities 16. 17. 18. 19. 20. 21. 22. Financing activites 23. 24. 25. 26. 27. 28. 29. 30. Beginning Cash 31. Ending Cash |
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started