Question
Problem 1: From the following information for Kevin's Kennels, prepare a statement of cash flows for the year ended December 31, 2015 using both the
Problem 1: From the following information for Kevin's Kennels, prepare a statement of cash flows for the year ended December 31, 2015 using both the indirect method.
Balance: 12/31/15 | Balance: 12/31/14 | ||||
Cash | 71,900 | 18,900 | |||
A/R | 78,000 | 45,000 | |||
Inventory | 70,000 | 90,000 | |||
Prepad Insurance | 3,600 | 2,600 | |||
Equipment | 340,000 | 290,000 | |||
Accumulated Depreciation | 80,000 | 20,000 | |||
Land | 120,000 | ||||
Security Deposits | 12,000 | 10,000 | |||
A/P | 35,000 | 30,000 | |||
Wage Payable | 6,000 | 10,000 | |||
Rent Payable | 8,000 | 4,000 | |||
Interest Payable | 6,500 | 7,500 | |||
Taxes Payable | 10,000 | 5,000 | |||
Note Payable | 130,000 | 150,000 | |||
Common Stock ($1 Each) | 300,000 | 160,000 | |||
Retained Earnings | 120,000 | 70,000 | |||
Sales | 1,200,000 | ||||
Cost of Goods Sold | 700,000 | ||||
Wage Expense | 220,000 | ||||
Rent Expense | 48,000 | ||||
Office Expense | 46,000 | ||||
Depreciation Expense | 60,000 | ||||
Utilities Expense | 15,000 | ||||
Insurance Expense | 6,000 | ||||
Interest Expense | 15,000 | ||||
Income Tax Expense | 27,000 |
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The land was acquired on March 31, 2015 by exchanging 60,000 shares of common stock worth $60,000 and cash for the balance of the purchase price. The additional common stock (other than that issued for the purchase of the land) was sold on September 30, 2015 for $1 per share. The company did not sell any equipment during the year. All equipment purchased during the year was purchased for cash. The retained earnings balance for both years is after all closing entries have been made. The Note Payable requires payments of $20,000 principal plus interest at 10% on June 30th of each year. Current stock price (12/31/15) is $4.00 per share.
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