Answered step by step
Verified Expert Solution
Question
1 Approved Answer
CASH FLOW STATEMENT Presented below is information related to the operating activities of Smithy Corp. December 2009 2008 Cash $ 58,000 $ 40,000 Accounts receivable
CASH FLOW STATEMENT Presented below is information related to the operating activities of Smithy Corp. December 2009 2008 Cash $ 58,000 $ 40,000 Accounts receivable 55,000 48,000 Inventory 35,000 22,000 Prepaid expenses 15,000 20,000 Land 36,000 20,000 Building 100,000 100,000 Accumulated depreciation- building (17,000) (8,000) Equipment 58,000 80,000 Accumulated depreciation- equipment (15,000 (20,000 Total $325.000 $302.000 Accounts payable $ 35,000 $ 39,000 Bonds payable 0 100,000 Common shares 200,000 100,000 Retained earnings 90.000 63.000 Total $325.000 $302.000 Income Statement 2009 Sales $408,000 Cost of goods sold 190.000 Gross profit 218,000 Depreciation expense 14,000 Other operating expenses 141.000 Earnings from operations 63,000 Loss on equipment sale 2,000 Earnings before income taxes 61,000 Income tax expense 19.000 Net earnings $ 42.000 Additional information for 2009: (a) Smithy Corp declared and paid a cash dividend of $15,000 (b) The company converted $100,000 of bonds into common shares. (c) Equipment with a cost of $22,000 was sold for $10,000. Land was acquired for cash. (d) Prepaid expenses pertain only to operating expenses; accounts payable pertains only to merchandise inventory purchases. Instructions (a) Prepare a complete cash flow statement for 2009 using the Indirect method in good form. (b) Prepare the Operating Activities section for 2009 using the direct method
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