CHAPTER 13 CHECKPOINT PROBLEM #2 Wilma Company had the following information available at the end of 2018: Income Statement For Year Ended December 31, 2018 Sales 441,000 Cost of Goods Sold 205,200 Gross Profit 235,800 Operating Expenses: Depreciation 14.800 Salaries 79,400 Insurance 10,300 Utilities 11.900 Total Operating Expenses 116,400 Operating Income 119,400 Other Expenses/Losses: Gain on Sale of Equipme 4,500 Interest Expense 6,400 (1,900) Income Before Taxes 117,500 Income Tax Expense 19,900 Net Income 97,600 The following additional information is available: a. Investments costing $38,000 were purchased for cash. b. Equipment costing $20,000 with accumualted depreciation of S2,300 was sold for $22,200 cash. c. Equipment costing $90,000 was purchased--$60,000 cash was paid and a $30,000 long-term promissory note was signed for the balance due. d. A cash dividend of $45,000 was declared and paid to shareholders during the year. e. $1,000 of the long-tern note payable was paid. f. 5,000 shares of $l-par value common stock were issued for S3 per share cash. g. Land costing S24,700 was sold for $24,700 cash. REQUIRED: A Complete a set of cash flow T-accounts using the indirect method of computing cash flows from operations B. Complete a set of cash flow T-accounts using the direct method of computing cash flows from operations CHAPTER 13 CHECKPOINT #2-INDIRECT METHOD CASH 15,800 Accounts Receivable 26,500 Merchandise Inventory Beg 64,600 Beg Beg OPERATING: End 25,800 End 71,100 Prepaid Insurance 14.900 Investments 25,000 Beg Beg End 20,000 End 63,000 Land 34,700 Equipment 184,000 Beg Beg End 10,000 End 254,000 Accum. Depr.-Equip. 87,100 Beg Accounts Payable 35,500 Beg INVESTING: 99,600 End 30,000 End Salaries Payable 15,500 Income Taxes Payable 13,000 Beg Beg 18,000 End 12,100 End FINANCING: Long-Term Notes Payable 73,000 Beg Common Stock, Sl-par 50,000 Beg 102,000 End 55,000 End APIC 52,700 Beg Retained Earnings 38,700 Beg 26,800 62,700 End 191,300 End CHAPTER 13 CHECKPOINT #2-DIRECT METHOD CASH 15,800 Accounts Receivable 26,500 Merchandise Inventory 64,600 Beg Beg Beg OPERATING: End 25,800 End 71,100 Prepaid Insurance 14,900 Beg Beg Investments 25,000 End 20,000 End 63,000 Land 34,700 Equipment 184,000 Beg Beg End 10,000 End 254,000 Accum. Depr.-Equip. 87,100 Accounts Payable 35,500 Beg Beg INVESTING: 99,600 End 30,000 End Salaries Payable 15,500 Income Taxes Payable 13,000 Beg Beg 18,000 End 12,100 End FINANCING: Long-Term Notes Payable 73,000 Beg Common Stock, Sl-par 50,000 Beg 102,000 End 55,000 End APIC 52,700 Retained Earnings 38,700 Beg Beg 26,800 62,700 End 91,300 End
