Question
MONTGOMERY INC. Comparative Balance Sheets December 31, 2018 and 2017 2018 2017 Assets Cash $ 54,100 $ 54,200 Accounts receivable, net 13,400 16,400 Inventory 120,100
MONTGOMERY INC. Comparative Balance Sheets December 31, 2018 and 2017 | |||||||
2018 | 2017 | ||||||
Assets | |||||||
Cash | $ | 54,100 | $ | 54,200 | |||
Accounts receivable, net | 13,400 | 16,400 | |||||
Inventory | 120,100 | 94,800 | |||||
Total current assets | 187,600 | 165,400 | |||||
Equipment | 66,500 | 56,100 | |||||
Accum. depreciationEquipment | (30,100 | ) | (20,700 | ) | |||
Total assets | $ | 224,000 | $ | 200,800 | |||
Liabilities and Equity | |||||||
Accounts payable | $ | 32,000 | $ | 34,400 | |||
Salaries payable | 600 | 800 | |||||
Total current liabilities | 32,600 | 35,200 | |||||
Equity | |||||||
Common stock, no par value | 159,800 | 148,200 | |||||
Retained earnings | 31,600 | 17,400 | |||||
Total liabilities and equity | $ | 224,000 | $ | 200,800 | |||
MONTGOMERY INC. Income Statement For Year Ended December 31, 2018 | ||||||
Sales | $ | 60,900 | ||||
Cost of goods sold | (25,300 | ) | ||||
Gross profit | 35,600 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 9,400 | ||||
Other expenses | 7,500 | |||||
Total operating expense | 16,900 | |||||
Income before taxes | 18,700 | |||||
Income tax expense | 4,500 | |||||
Net income | $ | 14,200 | ||||
Additional Information
No dividends are declared or paid in 2018.
Issued additional stock for $11,600 cash in 2018.
Purchased equipment for cash in 2018; no equipment was sold in 2018.
1. Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2018, using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
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The following transactions and events occurred during the year. Assuming that this company uses the indirect method to report cash provided by operating activities, indicate where each item would appear on its statement of cash flows by placing an X in the appropriate column(s). (More than one column may be used.)
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The following financial statements and additional information are reported.
IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 | ||||||||
2017 | 2016 | |||||||
Assets | ||||||||
Cash | $ | 105,100 | $ | 48,000 | ||||
Accounts receivable, net | 71,000 | 55,000 | ||||||
Inventory | 67,800 | 92,500 | ||||||
Prepaid expenses | 4,800 | 6,200 | ||||||
Total current assets | 248,700 | 201,700 | ||||||
Equipment | 128,000 | 119,000 | ||||||
Accum. depreciationEquipment | (29,000 | ) | (11,000 | ) | ||||
Total assets | $ | 347,700 | $ | 309,700 | ||||
Liabilities and Equity | ||||||||
Accounts payable | $ | 29,000 | $ | 36,000 | ||||
Wages payable | 6,400 | 15,800 | ||||||
Income taxes payable | 3,800 | 4,600 | ||||||
Total current liabilities | 39,200 | 56,400 | ||||||
Notes payable (long term) | 34,000 | 64,000 | ||||||
Total liabilities | 73,200 | 120,400 | ||||||
Equity | ||||||||
Common stock, $5 par value | 228,000 | 164,000 | ||||||
Retained earnings | 46,500 | 25,300 | ||||||
Total liabilities and equity | $ | 347,700 | $ | 309,700 | ||||
IKIBAN INC. Income Statement For Year Ended June 30, 2017 | ||||||
Sales | $ | 698,000 | ||||
Cost of goods sold | 415,000 | |||||
Gross profit | 283,000 | |||||
Operating expenses | ||||||
Depreciation expense | $ | 62,600 | ||||
Other expenses | 71,000 | |||||
Total operating expenses | 133,600 | |||||
149,400 | ||||||
Other gains (losses) | ||||||
Gain on sale of equipment | 2,400 | |||||
Income before taxes | 151,800 | |||||
Income taxes expense | 44,290 | |||||
Net income | $ | 107,510 | ||||
Additional Information
A $30,000 note payable is retired at its $30,000 carrying (book) value in exchange for cash.
The only changes affecting retained earnings are net income and cash dividends paid.
New equipment is acquired for $61,600 cash.
Received cash for the sale of equipment that had cost $52,600, yielding a $2,400 gain.
Prepaid Expenses and Wages Payable relate to Other Expenses on the income statement.
All purchases and sales of inventory are on credit.
rev: 12_05_2017_QC_CS-111198
Exercise 12-11 Part 1
Required:
(1) Prepare a statement of cash flows for the year ended June 30, 2017, using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
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