Question
Philadelphia Widget Corporation is in the process of preparing financial statements for the year ended December 31, 2015. They have completed the balance sheet and
Philadelphia Widget Corporation is in the process of preparing financial statements for the year ended December 31, 2015. They have completed the balance sheet and income statement as shown.
Philadelphia Widget Corporation | ||
---|---|---|
Income Statement | ||
For the year ended December 31, 2015 | ||
Revenue | $1,235,000 | |
Cost of Goods Sold | 806,356 | |
Gross Profit | $428,644 | |
Administrative Expenses: | ||
Salaries | $212,450 | |
Rent | 82,500 | |
Depreciation | 24,800 | |
Total Administrative Expense | 319,750 | |
Operating Profit | $108,894 | |
Gain on Sale of Equipment | 4,500 | |
Interest Expense | (42,115) | |
Net Income | $71,279 |
Philadelphia Widget Corporation | ||||||
---|---|---|---|---|---|---|
Comparative Balance Sheets | ||||||
December 31, 2015; 2014; and 2013 | ||||||
2015 | 2014 | 2013 | ||||
Cash | $119,411 | $89,564 | $105,644 | |||
Accounts Receivable | 85,455 | 83,118 | 78,400 | |||
Inventory | 41,600 | 48,560 | 62,600 | |||
Prepaid Expenses | 14,500 | 18,100 | 24,000 | |||
Total Current Assets | 260,966 | 239,342 | 270,644 | |||
Land | 50,000 | 50,000 | 50,000 | |||
Buildings & Equipment | $182,450 | $172,450 | $166,800 | |||
Accumulated Depreciation | 78,900 | 103,550 | 62,600 | 109,850 | 54,580 | 112,220 |
Total Assets | $414,516 | $399,192 | $432,864 | |||
Accounts Payable | $62,525 | $51,480 | $45,200 | |||
Wages Payable | 4,500 | 4,500 | 1,500 | |||
Unearned Revenue | 3,000 | |||||
Current Portion of Long-Term Debt | 50,000 | 50,000 | 50,000 | |||
Total Current Liabilities | 120,025 | 105,980 | 96,700 | |||
Long-Term Debt | 175,000 | 225,000 | 275,000 | |||
Common Stock, 3,500 shares outstanding | $35,000 | $35,000 | $35,000 | |||
Retained Earnings | 84,491 | 33,212 | 26,164 | |||
Total Stockholders Equity | 119,491 | 68,212 | 61,164 | |||
Total Liabilities & Equity | $414,516 | $399,192 | $432,864 |
Instructions
Prepare a Statement of Cash Flow using the indirect method for the 2015, using the above statements and the following additional information:
Equipment costing $30,000 was purchased in 2015.
Equipment having an original cost of $20,000 and accumulated depreciation of $8,500 was sold for $16,000 during 2015.
A dividend of $20,000 was declared and paid in 2015.
Philadelphia Widget Corporation | ||
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Statement of Cash Flows | ||
For the year ended December 31, 2015 | ||
Cash provided (used) by operating activities: | ||
Item | Amount | |
Adjustments to reconcile net income to net cash: | ||
Item | Amount | |
Item | Amount | |
Item | Amount | |
Item | Amount | |
Item | Amount | |
Item | Amount | |
Item | Amount | |
Net cash provided by operating activities | Amount | |
Cash provided (used) by investing activities: | ||
Item | Amount | |
Item | Amount | |
Net cash (used) by investing activities | Amount | |
Cash provided (used) by financing activities: | ||
Item | Amount | |
Item | Amount | |
Net cash (used) by financing activities | Amount | |
Total cash provided (used) | Amount | |
Cash at the beginning of the year | Amount | |
Cash at the end of the year | Amount |
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