Answered step by step
Verified Expert Solution
Question
1 Approved Answer
JC Company's income statement for Year 2 follows: Sales$900,000 Cost of Goods Sold500,000 Gross Margin400,000 Selling and Administrative expenses328,000 Net Operating Income72,000 Non-operating items: Gain
JC Company's income statement for Year 2 follows: Sales$900,000 Cost of Goods Sold500,000 Gross Margin400,000 Selling and Administrative expenses328,000 Net Operating Income72,000 Non-operating items: Gain on sale of equipment8,000 Income before taxes80,000 Income taxes24,000 Net income56,000 Its balance sheet amount at the end of year 1 and 2 are as follows: Year 2Year 1 ASSETS Cash and cash equivalent $4,000 $21,000 Accounts receivable 250,000 170,000 Inventory 310,000 260,000 Prepaid expenses 7,000 14,000 Total current assets 571,000 465,000 Property, plant and equipment 510,000 400,000 Less accumulated depreciation 132,000 120,000 Loans to Hymans Company 40,000 0 Total assets 989,000 745,000 Liabilities and Stockholder's Equity Accounts payable $310,000 $250,000 Accrued liabilities 20,000 30,000 Income taxes payable 45,000 42,000 Total current liabilities 375,000 322,000 Bonds payable 190,000 70,000 Total liabilities 565,000 392,000 Common Stock 300,000 270,000 Retained Earnings 124,000 83,000 Total Stockholder's Equity 424,000 353,000 Total liabilities and stockholder's equity $989,000 $745,000 Equipment that had a cost of $40,000 and on which there was accumulated depreciation of $30,000 was sold during Year 2 for $18,000. The company declared and paid in cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock. 1, compute cash received from customer 2,depreciation p42000( deduct or add) 3, increase in accounts receviable p80000(deduct or add) 4, increase in inventory p50000( deduct or add) 5, Decrease in prepaid expenses, P 7,000(deduct or add) 6, Increase in accounts payable, P 60,000(deduct or add) 7, Decrease in accrued liabilities, P10,000(deduct or add) 8. Increase in income taxes payable, P3,000(deduct or add) 9, Gain on sale of equipment, P8,000(deduct or add) 10, Total adjustments to net income to reconcile to net cash flow from operating activities 11, Net cash flow from operating activities 12, Net cash flow from investing activities 13, Net cash flows from financing activities 14, Net increase (decrease) in cash and cash equivalents 15. Cash paid for merchandise
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started