Question
PROBLEM#1: StatementofCashFlow TomandCompanyreportsthefollowingincomestatementfortheyearendedDecember31, 2012: Sales $2,100,000 Costofgoodssold 831,600 Grossprofit 1,268,400 Depreciationexpense 88,000 Sellingandadministrativeexpense 758,000 Incomebeforetax 422,400 Incometaxexpense 168,960 Netincome $253,440 Thecompanyalsoreportsthefollowinginformationfromthebalancesheet: December31, 2012 December31, 2011
PROBLEM#1:
StatementofCashFlow
TomandCompanyreportsthefollowingincomestatementfortheyearendedDecember31,
2012:
Sales
$2,100,000
Costofgoodssold
831,600
Grossprofit
1,268,400
Depreciationexpense
88,000
Sellingandadministrativeexpense
758,000
Incomebeforetax
422,400
Incometaxexpense
168,960
Netincome
$253,440
Thecompanyalsoreportsthefollowinginformationfromthebalancesheet:
December31,
2012
December31,
2011
Cash
$90,000
$24,000
Accountsreceivable
80,000
60,000
Inventory
14,000
16,000
Accountspayable
150,000
170,000
Accruedsellingandadminexpenses
12,000
8,000
Taxespayable
204,000
82,000
Dividendspayable
20,000
44,000
Required:
a.Prepare,ingoodform,theoperatingsectionofthestatementofcashflow,usingthe
direct
methodforTomandCompanyforDecember31,2012.
b.Prepare,ingoodform,theoperatingsectionofthestatementofcashflow,usingthe
indirect
methodforTomandCompanyforDecember31,2012
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Auditing The Art and Science of Assurance Engagements
Authors: Alvin A. Arens, Randal J. Elder, Mark S. Beasley, Joanne C. Jones
13th Canadian edition
133405508, 978-0133405507
