Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Gazelle Corporation's current-year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to

image text in transcribed
image text in transcribed
Gazelle Corporation's current-year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. Page 491 GAZELLE CORPORATION Comparative Balance Sheets December 31 Current Year Prior Year $123,450 77,100 240,600 15.100 456,250 262,250 (110,750) $607.750 $ 61,550 80,750 250,700 17,000 410,000 200,000 (95,000) $515,000 Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets Equipment Accum. depreciation-Equipment Total assets Liabilities and Equity Accounts payable Short-term notes payable Total current liabilities Long-term notes payable Total liabilities Equity Common stock, $5 par Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity $ 17.750 15,000 32,750 100.000 132,750 $102,000 10,000 112,000 77,500 189,500 215,000 200,000 30,000 o 230,000 $607.750 125,500 $515,000 GAZELLE CORPORATION Income Statement For Current Year Ended December 31 Sales $1,185,000 Cost of goods sold 595,000 Gross profit 590,000 Operating expenses Depreciation expense $ 38,600 Other expenses 362,850 Total operating expenses 401,450 188,550 Other gains (losses) Loss on sale of equipment (2,100 Income before taxes 186,450 Income taxes expense 28.350 Net income $ 158,100 Additional Information on Current-Year Transactions a. The loss on the cash sale of equipment was $2,100 (details in b). b. Sold equipment costing $51,000, with accumulated depreciation of $22,850, for $26,050 cash. C. Purchased equipment costing $113,250 by paying $43,250 cash and signing a long-term note payable for the balance. d. Borrowed $5,000 cash by signing a short-term note payable. e. Paid $47.500 cash to reduce the long-term notes payable. f. Issued 3,000 shares of common stock for $15 cash per share. 9. Declared and paid cash dividends of $53,600. Required 1. Prepare a complete statement of cash flows using the indirect method for the current year. Disclose any noncash investing and financing activities in a

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Future Of Audit Keeping Capital Markets Efficient

Authors: Keith Houghton, Christine Jubb, Michael Kend, Juliana Ng

1st Edition

1921666501, 978-1921666506

More Books

Students also viewed these Accounting questions

Question

They provide space for marginal glosses.

Answered: 1 week ago

Question

Distinguish between variable and fixed expenses.

Answered: 1 week ago