Question
I am COMPLEATLY lost on this. Please provide as much detail as possible because I have no idea where to even begin . Comparative balance
I am COMPLEATLY lost on this. Please provide as much detail as possible because I have no idea where to even begin.
Comparative balance sheets for 2013 and 2012 and an income statement for 2013 are provided below for Westeros Industries. Additional information from the accounting records of Westeros also is provided.
Westeros Industries
Comparative Balance Sheets
December 31, 2013 and 2012 ($ in 000)
2013 2012
Assets:
Cash $ 1,800 $ 1,125
Accounts receivable 1,800 1,350
Inventory 2,700 1,575
Land 2,025 1,800
Building 2,700 2,700
Less: Accumulated depreciation (900) (810)
Equipment 8,550 6,750
Less: Accumulated depreciation (1,575) (1,440)
Patent 3,600 4,500
$20,700 $17,550
Liabilities:
Accounts payable $ 2,250 $ 1,350
Accrued expenses payable 900 675
Lease liability land 450 0
Shareholders' Equity:
Common stock 9,450 9,000
Paid-in capitalexcess of par 2,250 2,025
Retained earnings 5,400 4,500
$20,700 $17,550
Westeros Industries
Income Statement
For year ended December 31, 2013 ($ in 000)
Revenues:
Sales revenue $7,935
Gain on sale of land 270 $8,205
Expenses:
Cost of goods sold $1,800
Depreciation expense-building 90
Depreciation expense-equipment 945
Loss on sale of equipment 45
Amortization of patent 900
Operating expenses 1,500 5,280
Net income $2,925
Additional information from the accounting records:
a. During 2013, equipment with a cost of $900,000 (90% depreciated) was sold.
b. The Statement of Shareholders Equity reveals reductions of $675,000 and $1,350,000 for stock dividends and cash dividends, respectively.
A. Required:
Prepare the statement of cash flows of Westeros for the year ended December 31, 2013. Present "cash flows from operating activities" by the direct method.
Refer to the data provided in the previous problem for Westeros Industries.
B. Required:
Prepare the statement of cash flows for Westeros Industries using theindirect method
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