Question
Question 4 (14 marks) Farmiga Inc. Balance Sheet December 31 2014 2013 Assets Cash $120,600 $176,400 Accounts Receivable 181,800 135,000 Inventory 369,000 257,400 Long-term Debt
Question 4 (14 marks)
Farmiga Inc. Balance Sheet December 31
2014 2013
Assets Cash $120,600 $176,400
Accounts Receivable 181,800 135,000
Inventory 369,000 257,400
Long-term Debt Investment 176,400 0
Property Plant and Equipment 1,008,000 828,000
Less: Accumulated Depreciation (292,500) (252,000)
$1,563,300 $1,144,800
Liabilities & Shareholder's Equity
Accounts Payable $157,500 $117,000
Dividends Payable 10,800 0
Income Tax Payable 25,200 28,800
Long-term Notes Payable 81,000 0
Common Shares 1,170,000 945,000
Retained Earnings 118,800 54,000
$1,563,300 $1,144,800
Farmiga Inc. Income Statement Year Ended December 31, 2014
Sales $1,137,600
Cost of Goods Sold 772,200
Gross profit 365,400
Operating expenses $265,500
Loss on Sale of Equipment 3,600 269,100
Profit from Operations 96,300
Interest expense 5,400
Interest revenue 9,900 4,500
Profit before Income Tax 100,800
Income tax expense 25,200 Profit $75,600.
Question 4 (continued) Required: Prepare a complete Statement of Cash Flow using the Indirect method . . . . . . . . . . . . . . . . . . . . . . . . . . . . . Additional Information:
1 Cash Dividends of $10,800 were declared on December 31, 2014, payable January 15, 2015
2 A long term debt investment was acquired for cash at a cost of $175,500
3 Depreciation expense is included in the operating expenses.
4 The company issued 22,500 common shares for cash on March 31, 2014. The fair value of the shares were $10 per share. The proceeds were used to purchase additional equipment
5 Equipment that originally cost $45,000 was sold during the year for cash. The equipment had a net book value of $16,200 at the time of sale.
6 The company issued a note payable for $90,000 and repaid $9,000 of it by year end.
7 Accounts Payable is used for Merchandise purchases, Accounts Receivable relate to Sales
8 65,625 shares were outstanding Dec. 31, 2013. 15,625 more common shares were issued Aug 31/2014
9 Westerner Inc. is a private company reporting under ASPE.
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