Question
Joyner Companys income statement for Year 2 follows: Sales $ 708,000 Cost of goods sold 352,000 Gross margin 356,000 Selling and administrative expenses 216,000 Net
Joyner Companys income statement for Year 2 follows: |
Sales | $ | 708,000 |
Cost of goods sold | 352,000 | |
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Gross margin | 356,000 | |
Selling and administrative expenses | 216,000 | |
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Net operating income | 140,000 | |
Gain on sale of equipment | 6,000 | |
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Income before taxes | 146,000 | |
Income taxes | 58,400 | |
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Net income | $ | 87,600 |
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Its balance sheet amounts at the end of Years 1 and 2 are as follows: |
Year 2 | Year 1 | |||
Assets | ||||
Cash | $ | 39,000 | $ | 91,800 |
Accounts receivable | 259,000 | 138,000 | ||
Inventory | 319,000 | 278,000 | ||
Prepaid expenses | 9,000 | 18,000 | ||
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Total current assets | 626,000 | 525,800 | ||
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Property, plant, and equipment | 621,000 | 506,000 | ||
Less accumulated depreciation | 166,700 | 131,700 | ||
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Net property, plant, and equipment | 454,300 | 374,300 | ||
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Loan to Hymans Company | 41,000 | 0 | ||
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Total assets | $ | 1,121,300 | $ | 900,100 |
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Liabilities and Stockholders' Equity | ||||
Accounts payable | $ | 317,000 | $ | 270,000 |
Accrued liabilities | 46,000 | 57,000 | ||
Income taxes payable | 85,500 | 80,100 | ||
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Total current liabilities | 448,500 | 407,100 | ||
Bonds payable | 192,000 | 108,000 | ||
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Total liabilities | 640,500 | 515,100 | ||
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Common stock | 330,000 | 288,000 | ||
Retained earnings | 150,800 | 97,000 | ||
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Total stockholders' equity | 480,800 | 385,000 | ||
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Total liabilities and stockholders' equity | $ | 1,121,300 | $ | 900,100 |
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Equipment that had cost $31,000 and on which there was accumulated depreciation of $11,200 was sold during Year 2 for $25,800. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock. |
Required: | |||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||||
1. | Using the indirect method, compute the net cash for operating activities for Year 2. (Negative amount should be indicated by a minus sign.)
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