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Comparative balance sheets for Bayshore Industries, Inc. as of December 31 year 2 and year 1 are presented below. Prepare the cash from operations section
Comparative balance sheets for Bayshore Industries, Inc. as of December 31 year 2 and year 1 are presented below. Prepare the cash from operations section of the statement of cash flows using the DIRECT method. Bayshore Industries, Inc. Balance Sheets December 31, Year 2 and Year 1 Year 2 Year 1 Change Assets Current assets Cash and cash equivalents $ 216,000 $ 144,000 $ 72,000 Trade receivables net 3,434,000 1,971,000 1,463,000 Inventory 810,000 216,000 594,000 Prepaid expenses 18,000 -- 18,000 Total current assets 4,478,000 2,331,000 2,147,000 Property and equipment 7,780,000 7,740,000 40,000 Less: accumulated depreciation 576,000 455,000 121,000 Property and equipment net 7,204,000 7,285,000 (81,000) Intangibles, less accumulated amortization of $14,400 year 2 and $7,200 year 1 21,600 28,800 (7,200) Total assets $ 11,703,600 $ 9,644,800 $ 2,058,800 Liabilities and Stockholders Equity Current liabilities Accounts payable and accrued expenses $ 872,600 $ 396,800 $ 475,800 Line of credit 108,000 90,000 18,000 Current portion of long-term debt 29,000 27,000 2,000 Total current liabilities 1,009,600 513,800 495,800 Long-term debt 3,069,000 3,098,000 (29,000) Total liabilities 4,078,600 3,611,800 466,800 Stockholders equity Common stock 9,000 9,000 0 Additional paid-in capital 5,400,000 5,400,000 0 Retained earnings 2,216,000 624,000 1,592,000 Total stockholders equity 7,625,000 6,033,000 1,592,000 Total liabilities and stockholders equity $ 11,703,600 $ 9,644,800 $ 2,058,800 Bayshore Industries, Inc. Statement of Income and Retained Earnings For the year ended December 31, Year 2 Net sales $ 19,800,000 Cost of sales 9,000,000 Gross profit on sales 10,800,000 Operating expenses Selling expenses 3,600,000 General and administrative expenses 4,050,000 Other operating expenses 393,300 Total operating expenses 8,043,300 Operating income 2,756,700 Other income and expenses Gain/loss on property and equipment disposals 18,000 Interest income 9,000 Interest expense (252,000) Other income and expenses net (225,000) Income before income taxes 2,531,700 Provision for income taxes 759,700 Net income 1,772,000 Retained earnings beginning 624,000 Dividends paid 180,000 Retained earnings ending $ 2,216,000
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