Question
Jackson Ski Haus had the following statements prepared as of December 31, 2012. JACKSON SKI HAUS COMPARATIVE BALANCE SHEET AS OF DECEMBER 31 2012 2011
Jackson Ski Haus had the following statements prepared as of December 31, 2012.
JACKSON SKI HAUS
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31 2012 2011
Cash $ 2,500 $ 4,000
Accounts receivable 103,000 97,000
Short-term investments (Available-for-sale) 96,000 121,000
Inventories 91,000 54,000
Prepaid insurance 4,000 6,000
Ski equipment 89,000 43,000
Accumulated depr.equipment (23,500) (18,000)
Trademarks 79,000 83,000
Total assets $441,000 $390,000
Accounts payable $ 92,200 $ 75,000
Income taxes payable 21,800 15,700
Wages payable 4,000 9,000
Short-term loans payable to bank 23,500 0
Long-term loans payable 75,000 125,000
Common stock, $1 par 100,000 100,000
Additional paid-in capital 20,000 20,000
Retained earnings 104,500 45,300
Total liabilities & equity $441,000 $390,000
JACKSON SKI HAUS
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2012
Sales $540,200
Cost of goods sold 302,000
Gross margin 238,200
Operating expenses 94,000
Operating income 144,200
Interest expense $20,500
Loss on sale of equipment 4,000
Income before income tax 119,700
Income tax expense 40,500
Net income $ 79,200
Additional information:
1. Dividends in the amount of $20,000 were declared and paid during 2012.
2. Depreciation expense and amortization expense are included in operating expenses.
3. Equipment that had a cost of $25,000 and was 20% depreciated was sold during 2012.
Instructions
Prepare a statement of cash flows using the direct method. Include a reconciliation schedule for each source of cash flows. Then prepare the operating activities section using the indirect method.
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