Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Jessie Griffith the Managing Director of Erica Mayers Inc has made the declaration to the Shareholders that no dividend will be paid this year despite

image text in transcribed
Jessie Griffith the Managing Director of Erica Mayers Inc has made the declaration to the Shareholders that no dividend will be paid this year despite the company making a significant profit. In addition, the company has a significant overdraft and one shareholder has been overheard in the meeting saying "something fishy going on round here" Managing Director summoned you to a meeting to assist him in the preparation of a response to the shareholders. He presented the financial statements below: 2018 Ena Myersin Balance Sheet at December 11, 2029 2019 Assets Current Assets Cash (Bank overdraft) Malable seres $68.850 Accounts robe $796,500 Invertory $820,800 Prepadenges 924.300 Talcument auss 51.703.200 Long term investment $10.000 Loans receive $162.000 Pent and equipment $3,199.500 Les accumulated depreciation Net part and equipmert 92.309,250 Other fedmets SIL.400 Total 54.456.750 Ena Myersin Income Satement for the periodendro December 31, 2019 Sales $4.050.000 Less contgooch 24511.000 Gross margir $1.509,000 Les operating experses 11.255.500 Net operating income $26.500 Other expenses and revenue Gain on the sale of investment 581.000 Los on sale of emert 87.000 S44.550 $22.950 $550.500 $837,000 56.750 $1.464.250 5175.500 S500 2.410.000 1256.000 $1,624 000 5121.500 93.530,250 Income before taxes Less income taxe Net income $137.500 $108.000 229,500 abilities and equity Gument liabilities Accounts payable Au labies Totalcar labies Mortgage Long tam notes Toallab Stockholders' equity Gormon stock Retardeaming Total $1.151.550 5212.200 $164.850 $140, 500 $837.000 0.350, 350 $79.500 $216.000 sses, 500 $249.750 51.773.250 $1,471.500 5634.500 $1,350,000 5405.000 3.530,250 The following information is available about the company's activities during 2019, the current year. A payment of $101.250 was made on the mortgage. Long-term notes with a value of $513,000 were repaid during the year. Equipment was sold during the year for $94,500. The equipment has a cost of $175,500 and had $54,000 in accumulated depreciation to the date of sale. Long-term investments were sold during the year for $148,500. These investments had cost $67,500 when purchased several years ago Required: Prepare a statement of cash flows using the indirect method which the Managing Director can use to explain to the shareholders the changes in cash over the year

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

Construction Industry IRS Audit Techniques Guide

Authors: Internal Revenue Service

1st Edition

1304131920, 978-1304131928

More Books

Students also viewed these Accounting questions

Question

75. Let a1 Answered: 1 week ago

Answered: 1 week ago

Question

6. Identify seven types of hidden histories.

Answered: 1 week ago

Question

What is the relationship between humans and nature?

Answered: 1 week ago