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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 | $ | 97,000 | $ | 70,800 |
Accounts receivable | 642,000 | 675,000 | ||
Inventory | 639,200 | 446,000 | ||
Prepaid expenses | 30,800 | 18,000 | ||
Total current assets | 1,409,000 | 1,209,800 | ||
Property, plant, and equipment | 2,500,000 | 1,904,000 | ||
Less accumulated depreciation | 646,200 | 583,400 | ||
Net property, plant, and equipment | 1,853,800 | 1,320,600 | ||
Long-term investments | 134,600 | 208,000 | ||
Loans to subsidiaries | 146,000 | 83,000 | ||
Total assets | $ | 3,543,400 | $ | 2,821,400 |
Liabilities and Stockholders' Equity | ||||
Current liabilities | ||||
Accounts payable | $ | 911,600 | $ | 596,000 |
Accrued liabilities | 40,600 | 65,400 | ||
Income taxes payable | 166,800 | 138,800 | ||
Total current liabilities | 1,119,000 | 800,200 | ||
Bonds payable | 750,000 | 478,000 | ||
Total liabilities | 1,869,000 | 1,278,200 | ||
Stockholders equity: | ||||
Common stock | 1,142,000 | 1,026,000 | ||
Retained earnings | 532,400 | 517,200 | ||
Total stockholders equity | 1,674,400 | 1,543,200 | ||
Total liabilities and stockholders' equity | $ | 3,543,400 | $ | 2,821,400 |
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 $406,000 were repaid during this year. |
c. | Equipment was sold during this year for $83,000. The equipment had cost $182,000 and had $71,200 in accumulated depreciation on the date of sale. |
d. | Long-term investments were sold during the year for $162,000. These investments had cost $73,400 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 | $ | 3,520,000 | ||
Cost of goods sold | 2,182,400 | |||
Gross margin | 1,337,600 | |||
Selling and administrative expenses | 1,067,800 | |||
Net operating income | 269,800 | |||
Nonoperating items: | ||||
Gain on sale of investments | $ | 88,600 | ||
Loss on sale of equipment | (27,800) | 60,800 | ||
Income before taxes | 330,600 | |||
Income taxes | 106,000 | |||
Net income | $ | 224,600 | ||
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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