Question
Prepare a statement of cash flow using the DIRECT METHOD. (please show all calculations) 2017 2016 Assets: Cash 140,000 60,000 Accounts receivable, net 87,000 65,000
Prepare a statement of cash flow using the DIRECT METHOD. (please show all calculations)
2017 | 2016 | ||
Assets: | |||
Cash | 140,000 | 60,000 | |
Accounts receivable, net | 87,000 | 65,000 | |
Inventory | 55,000 | 50,000 | |
Prepaid expenses | 12,000 | 20,000 | |
Investments | 70,000 | 20,000 | |
Property, plant & equipment | 660,000 | 500,000 | |
Accumulated depreciation | (100,000) | (60,000) | |
Patents | 16,000 | 20,000 | |
Total Assets | 940,000 | 675,000 | |
Liabilities & Equity | |||
Accounts payable | 40,000 | 45,000 | |
Accrued liabilities | 15,000 | 20,000 | |
Taxes payable | 10,000 | 5,000 | |
Long-term Notes Payable | 100,000 | 50,000 | |
Common stock | 100,000 | 100,000 | |
Additional paid in capital | 290,000 | 260,000 | |
Retained earnings | 385,000 | 195,000 | |
Total liabilities and equity | 940,000 | 675,000 | |
Sales | 1,200,000 | ||
Cost of goods sold | 650,000 | ||
Gross profit | 550,000 | ||
Operating expenses | 180,000 | ||
Pre-tax Operating income | 370,000 | ||
Gain on sale of investments | 10,000 | ||
Loss on sale of equipment | (5,000) | ||
Pre-tax income | 375,000 | ||
Income taxes | 75,000 | ||
Net income | 300,000 | ||
a. Stock option expense of $30,000 was recognized in 2017 | |||
b. Equipment of $200,000 was purchased using $50,000 note payable and cash | |||
c. Equipment with cost of $40,000 and book value of $30,000 was sold for $25,000 | |||
d. Investments with a cost of $20,000 were sold for $30,000 |
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