Kazaam Company, a merchandiser, recently completed its calendar-year 2015 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company's statements of financial position and income statement follow. 2014 KAZAAM COMPANY Comparative Statements of Financial Position December 31, 2014 and 2015 2015 Assets Cash $ 49,600 Accounts receivable 65,880 Merchandise inventory 277 500 Prepaid expenses 1,500 Equipment 158,500 Accum depreciation-Equipment (36,625) $ 73,000 60,000 251,500 1.800 106,500 (46 000) Total assets $ 516,355 S 446 800 Liabilities and Equity Accounts payable Short-term notes payable Long-term notes payable Share capital-Ordinary, S5 par value Share premium-Ordinary Retained earnings $ 61,280 10 000 60.000 162 500 36.000 186 575 $ 111,000 6,000 48 250 150,500 0 131 050 Total liabilities and equity $ 516 355 $ 446 800 KAZAAM COMPANY Income Statement For Year Ended December 31, 2015 Sales Cost of goods sold $ 583,500 289,000 294,500 Gross profit Operating expenses Depreciation expense Other expenses $ 20,000 133,600 153,600 Other gains (losses) Loss on sale of equipment 5,875 Profit before tax Income tax expense 135 025 23,000 Net profit $ 112,025 Additional Information on Year 2015 Transactions a. The loss on the cash sale of equipment was $5 875 (details in b). b. Sold equipment costing $46,875, with accumulated depreciation of S29,375 for $11.625 cash c. Purchased equipment costing 898 875 by paying $35,000 cash and signing a long-term note payable for the balance d. Borrowed $4.000 cash by signing a short-term note payable e. Paid $52,125 cash to reduce the long-term notes payable f. Issued 2.400 ordinary shares for $20 cash per share g. Declared and paid cash dividends of $56 500. The company's management wants to classify payments for dividends as financing activities Prepare a complete statement of cash flows; report its operating activities using the indirect method Disclose any noncash investing and financing activities in a note. (Amounts to be deducted should be indicated with a minus sign. Omit the "S" sign in your response.) $ KAZAAM COMPANY Statement of Cash Flows For Year Ended December 31, 2015 Cash flows from operating activities (Click to select) Adjustments to reconcile profit to net cash provided by operating activities: (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) (Click to select) Cash generated from operations (Click to select) Net cash (Click to select) v operating activities Cash flows from investing activities (Click to select) (Click to select) I MIO Net cash (Click to select) investing activities Cash flows from financing activities (Click to select) (Click to select) (Click to select) (Click to select)
