Resource:ABC Company History and ABC Financial Data Excelspreadsheet and Adjusted Balance Sheet and Income Statement from the Week 4 individual assignment

Preparethe Direct and Indirect Statements of Cash Flow using the Adjusted Balance Sheet and Income Statement from the Week 4 Individual Assignment.

Submitthe Direct and Indirect Cash Flow Statements in a MicrosoftExcelspreadsheet.

2013 Cash and Cash Equivalents Receivables, net Inventory Other Current Assets Property and Equipment, at cost Accumulated Depreciation and Amortization Goodwill Deferred Tax Asset Accounts Payable Accrued Salaries and Related Expenses Sales Taxes Payable Deferred Revenue Income Taxes Payable Current Installments of Long-Term Debt Other Accrued Expenses Long-Term Debt, excluding current installments Other Long-Term Liabilities Deferred Tax Liability Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income Treasury Stock Common stock Net Sales Cost of Sales Selling, General and Administrative Depreciation and Amortization Interest and Investment Income Interest Expense Provision for Income Taxes Foreign Currency Translation Adjustments Cash Flow Hedges, net of tax Other Comprehensive Income Dividends Tax rate Shares Issued Under Employee Stock Plans Tax Effect of Stock-Based Compensation Restricted Stock Repurchases of Common Stock 2012 4,960.00 1,398.00 $12,346.83 895.00 36,033.00 (15,684.00) 1,289.00 88.00 5,797.00 1,428.00 396.00 1,337.00 12.00 33.00 1,746.00 14,691.00 2,042.00 633.00 8,402.00 23,180.00 46.00 (19,194.00) 88.00 78,812.00 51,417.02 16,597.00 1,595.00 (12.00) 711.00 (3,082.00) 375.60 (12.00) (10.00) (2,243.00) 40% 103.00 123.00 228.00 (8,500.00) 2,494.00 1,413.00 11,512.00 900.00 38,491.00 (17,473.00) 1,046.00 473.00 5,192.00 1,200.00 472.00 1,262.00 (107.00) (783.00) 1,794.00 9,475.00 2,029.00 545.00 7,948.00 20,038.00 397.00 (10,694.00) 88.00 74,754.00 48,912.00 16,508.00 1,568.00 (87.00) 632.00 (2,686.00) 100.00 5.00 (1.00) (1,743.00) 40% 678.00 82.00 222.00 (4,000.00) 4,523.00 6,739.00 (1,332.00) (987.00) (1,028.00) (275.00) (12.00) (1,389.00) (206.00) 88.00 5,222.00 (1,289.00) (8,546.00) 241.00 (2,243.00) (37.00) 4,356.00 6,038.00 (1,276.00) (905.00) (1,121.00) (204.00) (10.00) (1,312.00) (170.00) 50.00 (32.00) (3,984.00) 784.00 (1,743.00) (59.00) Additional Info: Cash Sales Collections on Receivables Purchases Wages Payments to Suppliers Tax Payments Interest payments Capital Expenditures Payments for Businesses Acquired Proceeds from Sales of Property and Equipment Proceeds from Long-Term Borrowings Repayments of Long-Term Debt Repurchases of Common Stock Proceeds from Sales of Common Stock Cash Dividends Paid to Stockholders Other Financing Activities (A) Depreciation Expense Using Straight-Line MethodABC Company has the following assets acquired on January 1, 2013 requiring depreciation calculation: Asset Cost Plant with 30 year life at a cost of $660,000 660 Land at a cost of $2,250,000 2,250 Machinery and Equipment with 20 year life at a cost of 79,000. 79 Truck with a life of 7 years at a cost of $42,000 42 3,031 Cost Life 30 Annual Dep. Expense 20 7 - Life Plant Amount of Depreciation 660,000 22000 30 Machinery and Equipment Amount of Depreciation 79,000 3950 20 Truck Amount of Depreciation 42,000 6000 7 Amount 31950 Amount Journal Entry Depreciation Expense Accumulated Depreciation on Plant Accumulated Depreciation on Machinery/Equip Accumulated Depreciation on Truck 22000 3950 6000 (B) Inventory CalculationA physical inventory on December 31, 2013, shows 810 units on hand. Calculate Cost of Goods Sold (COGS) using average cost. Purchases Beginning Inventory January 5, 2013 March 25, 2013 June 8, 2013 September 15, 2013 December 15, 2013 First In First Out Units Cost 800 950 950 745 625 505 4,575 Total 14.39 13.46 12.81 13.65 13.25 14.97 Units Cost of Goods Sold Ending Inventory 11,512 12,787 12,170 10,169 8,281 7,560 62,479 Purchase Purchase Purchase Purchase Purchase Total Purchases Amount 3,765 810 50,877.75 11601.1 3,765 810 50832.25 11646.6 Cost of Goods Sold Ending Inventory 3,765 810 51417.02 11061.83 Cost of Goods Sold Inventory $51,417.02 Last In Last Out Cost of Goods Sold Ending Inventory Average Cost Method $51,417.02 (C ) Error Corrections(1) An error was discovered during 2013 relating to the understatement of depreciation expense in 2011 resulting in a Prior Period Adjustment of $1,505 before taxes. Retained Earnings Defferred Tax Liability Accumuulated Depreciation 903 602 1505 (2) ABC Company changed its method of valuing inventory during 2013. The cumulative increase in income from the change in inventory methods was $1,285 before taxes. Inventory Deferred Tax Liability Retained Earnings 1285 514 771 Statement of Net Income Net Sales Less Cost of Goods Sold Gross Profit Less Selling & Distribution Expenses Depreciation and Amortization Operating Income (loss) Add Interest and Investment Income Less Interest expense Net Income After Interest but before Income Tax Less Provision for Income Tax Net Income 78,812.00 (51,417.02) 27,394.98 16,597.00 1,595.00 -12 711 18,192.00 9,202.98 699 8,503.98 (3,082.00) 5,421.98 Statement of Net Income Retained Earnings Less Adjustment of errors 23,180.00 -640 22,540.00 Balance Sheet Cash and Cash Equivalents Receivables, net Inventory Other Current Assets Total Current Assets Property and Equipment, at cost Accumulated Depreciation and Amortization Net Fixed Assets Goodwill Deferred Tax Asset Total Assets 4,960.00 1,398.00 $12,346.83 895.00 19,599.83 36,033.00 (15,684.00) 20,349.00 1,289.00 88.00 Liabilities & equity Accounts Payable Accrued Salaries and Related Expenses Sales Taxes Payable Deferred Revenue Income Taxes Payable Current Installments of Long-Term Debt Other Accrued Expenses Total Current Liabilities Long-Term Debt, excluding current installments Other Long-Term Liabilities Deferred Tax Liability Total Long term liabilities Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income Less Treasury Stock Common stock Total liabilities & equity 1,377.00 41,325.83 5,797.00 1,428.00 396.00 1,337.00 12.00 33.00 1,746.00 10,749.00 14,691.00 2,042.00 633.00 17,366.00 8,402.00 23,180.00 46.00 (19,194.00) 88.00 12,522.00 40,637.00 Footnotes 1. Inventory: The inventory method used for the period ending December 31, 2013 was the average cost. ABC Company changed the method of valuing inventory during 2013. The cumulative increase in income from the change in inventory methods was $1,285 before taxes. 2. Cost of Goods Sold: For the calculation for COGS the average inventory cost was used to maintain consistency throughout the financial statements. 3. Depreciation: Straight line depreciation method was used to determine the accumulated expense of the property, land, and equipment. Statement of Retained Earnings: Amount $ Retained Earnings, January 1 Prior Period Adjustment Understated depreciation Change in inventory method Retained Earnings, as adjusted Add: Net Income Retained Earnings, December 31 $20,038.00 ($903.00) $771.00 $19,906.00 $7,988.98 $27,894.98 Statement of Comprehensive Income: Amount $ Revenue: Net Sales Cost of Sales Gross Profit Operational Expenses: Selling, General, Administrative Depreciation and Amortization Total Operating Expense Operating Income Interest Income Interest Expense Income Before Taxes Income Tax Expense Net Income $78,812.00 ($51,417.02) $27,394.98 $16,597.00 $1,595.00 $18,192.00 $9,202.98 ($12.00) $711.00 $8,503.98 $515.00 $7,988.98 Statement of Owners Equity: Amount $ Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income Less Treasury Stock Common Stock Total Owner's Equity, Dec 31, 2013 $8,402.00 $27,894.98 $46.00 ($19,194.00) $88.00 $17,236.98 Calculate Foreign Currency Translation: Date Total Info 12/31/2010 Cost of Canadian Subsidiary 12/31/2011 Interest in the subsidary @100% 12/31/2012 Interest in the subsidary @100% 12/31/2013 Interest in the subsidary @100% Canadian Dollar $5,250.00 $5,277.77 $5,166.18 $5,182.61 Exchange Rate 1.00529 0.978857 1.003179 0.940531 US Dollar $5,277.77 $5,166.18 $5,182.61 $4,874.40 Gain/Loss ($27.77) $111.59 ($16.42) $308.20 $375.60 2013 Cash and Cash Equivalents Receivables, net Inventory Other Current Assets Property and Equipment, at cost Accumulated Depreciation and Amortization Goodwill Deferred Tax Asset Accounts Payable Accrued Salaries and Related Expenses Sales Taxes Payable Deferred Revenue Income Taxes Payable Current Installments of Long-Term Debt Other Accrued Expenses Long-Term Debt, excluding current installments Other Long-Term Liabilities Deferred Tax Liability Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income Treasury Stock Common stock Net Sales Cost of Sales Selling, General and Administrative Depreciation and Amortization Interest and Investment Income Interest Expense Provision for Income Taxes Foreign Currency Translation Adjustments Cash Flow Hedges, net of tax Other Comprehensive Income Dividends Tax rate Shares Issued Under Employee Stock Plans Tax Effect of Stock-Based Compensation Restricted Stock Repurchases of Common Stock 2012 4,960.00 1,398.00 $12,346.83 895.00 36,033.00 (15,684.00) 1,289.00 88.00 5,797.00 1,428.00 396.00 1,337.00 12.00 33.00 1,746.00 14,691.00 2,042.00 633.00 8,402.00 23,180.00 46.00 (19,194.00) 88.00 78,812.00 51,417.02 16,597.00 1,595.00 (12.00) 711.00 (3,082.00) 375.60 (12.00) (10.00) (2,243.00) 40% 103.00 123.00 228.00 (8,500.00) 2,494.00 1,413.00 11,512.00 900.00 38,491.00 (17,473.00) 1,046.00 473.00 5,192.00 1,200.00 472.00 1,262.00 (107.00) (783.00) 1,794.00 9,475.00 2,029.00 545.00 7,948.00 20,038.00 397.00 (10,694.00) 88.00 74,754.00 48,912.00 16,508.00 1,568.00 (87.00) 632.00 (2,686.00) 100.00 5.00 (1.00) (1,743.00) 40% 678.00 82.00 222.00 (4,000.00) 4,523.00 6,739.00 (1,332.00) (987.00) (1,028.00) (275.00) (12.00) (1,389.00) (206.00) 88.00 5,222.00 (1,289.00) (8,546.00) 241.00 (2,243.00) (37.00) 4,356.00 6,038.00 (1,276.00) (905.00) (1,121.00) (204.00) (10.00) (1,312.00) (170.00) 50.00 (32.00) (3,984.00) 784.00 (1,743.00) (59.00) Additional Info: Cash Sales Collections on Receivables Purchases Wages Payments to Suppliers Tax Payments Interest payments Capital Expenditures Payments for Businesses Acquired Proceeds from Sales of Property and Equipment Proceeds from Long-Term Borrowings Repayments of Long-Term Debt Repurchases of Common Stock Proceeds from Sales of Common Stock Cash Dividends Paid to Stockholders Other Financing Activities (A) Depreciation Expense Using Straight-Line MethodABC Company has the following assets acquired on January 1, 2013 requiring depreciation calculation: Asset Cost Plant with 30 year life at a cost of $660,000 660 Land at a cost of $2,250,000 2,250 Machinery and Equipment with 20 year life at a cost of 79,000. 79 Truck with a life of 7 years at a cost of $42,000 42 3,031 Cost Life 30 Annual Dep. Expense 20 7 - Life Plant Amount of Depreciation 660,000 22000 30 Machinery and Equipment Amount of Depreciation 79,000 3950 20 Truck Amount of Depreciation 42,000 6000 7 Amount 31950 Amount Journal Entry Depreciation Expense Accumulated Depreciation on Plant Accumulated Depreciation on Machinery/Equip Accumulated Depreciation on Truck 22000 3950 6000 (B) Inventory CalculationA physical inventory on December 31, 2013, shows 810 units on hand. Calculate Cost of Goods Sold (COGS) using average cost. Purchases Beginning Inventory January 5, 2013 March 25, 2013 June 8, 2013 September 15, 2013 December 15, 2013 First In First Out Units Cost Total 800 950 950 745 625 505 4,575 14.39 13.46 12.81 13.65 13.25 14.97 Units 11,512 12,787 12,170 10,169 8,281 7,560 62,479 Purchase Purchase Purchase Purchase Purchase Total Purchases Amount Cost of Goods Sold Ending Inventory 3,765 810 50,877.75 11601.1 3,765 810 50832.25 11646.6 Last In Last Out Cost of Goods Sold Ending Inventory Average Cost Method Cost of Goods Sold Ending Inventory 3,765 810 Cost of Goods Sold Inventory $51,417.02 51417.02 11061.83 $51,417.02 (C ) Error Corrections(1) An error was discovered during 2013 relating to the understatement of depreciation expense in 2011 resulting in a Prior Period Adjustment of $1,505 before taxes. Retained Earnings Defferred Tax Liability Accumuulated Depreciation 903 602 1505 (2) ABC Company changed its method of valuing inventory during 2013. The cumulative increase in income from the change in inventory methods was $1,285 before taxes. Inventory Deferred Tax Liability Retained Earnings 1285 514 771 Statement of Net Income Net Sales Less Cost of Goods Sold Gross Profit Less Selling & Distribution Expenses Depreciation and Amortization Operating Income (loss) Add Interest and Investment Income Less Interest expense Net Income After Interest but before Income Tax Less Provision for Income Tax Net Income 78,812.00 (51,417.02) 27,394.98 16,597.00 1,595.00 18,192.00 9,202.98 -12 711 699 8,503.98 (3,082.00) 5,421.98 Statement of Net Income Retained Earnings Less Adjustment of errors 23,180.00 -640 22,540.00 Balance Sheet Cash and Cash Equivalents Receivables, net Inventory Other Current Assets Total Current Assets Property and Equipment, at cost Accumulated Depreciation and Amortization Net Fixed Assets Goodwill Deferred Tax Asset Total Assets 4,960.00 1,398.00 $12,346.83 895.00 19,599.83 36,033.00 (15,684.00) 20,349.00 1,289.00 88.00 Liabilities & equity Accounts Payable Accrued Salaries and Related Expenses Sales Taxes Payable Deferred Revenue Income Taxes Payable Current Installments of Long-Term Debt Other Accrued Expenses Total Current Liabilities Long-Term Debt, excluding current installments Other Long-Term Liabilities Deferred Tax Liability Total Long term liabilities Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income Less Treasury Stock Common stock Total liabilities & equity 1,377.00 41,325.83 5,797.00 1,428.00 396.00 1,337.00 12.00 33.00 1,746.00 10,749.00 14,691.00 2,042.00 633.00 17,366.00 8,402.00 23,180.00 46.00 (19,194.00) 88.00 12,522.00 40,637.00 Footnotes 1. Inventory: The inventory method used for the period ending December 31, 2013 was the average cost. ABC Company changed the method of valuing inventory during 2013. The cumulative increase in income from the change in inventory methods was $1,285 before taxes. 2. Cost of Goods Sold: For the calculation for COGS the average inventory cost was used to maintain consistency throughout the financial statements. 3. Depreciation: Straight line depreciation method was used to determine the accumulated expense of the property, land, and equipment. Statement of Retained Earnings: Amount $ Retained Earnings, January 1 Prior Period Adjustment Understated depreciation Change in inventory method Retained Earnings, as adjusted Add: Net Income Retained Earnings, December 31 $20,038.00 ($903.00) $771.00 $19,906.00 $7,988.98 $27,894.98 Statement of Comprehensive Income: Amount $ Revenue: Net Sales Cost of Sales Gross Profit Operational Expenses: Selling, General, Administrative Depreciation and Amortization Total Operating Expense Operating Income Interest Income Interest Expense Income Before Taxes Income Tax Expense Net Income $78,812.00 ($51,417.02) $27,394.98 $16,597.00 $1,595.00 $18,192.00 $9,202.98 ($12.00) $711.00 $8,503.98 $515.00 $7,988.98 Statement of Owners Equity: Amount $ Paid-In Capital Retained Earnings Accumulated Other Comprehensive Income Less Treasury Stock Common Stock Total Owner's Equity, Dec 31, 2013 $8,402.00 $27,894.98 $46.00 ($19,194.00) $88.00 $17,236.98 Calculate Foreign Currency Translation: Date Info 12/31/2010 Cost of Canadian Subsidiary 12/31/2011 Interest in the subsidary @100% 12/31/2012 Interest in the subsidary @100% 12/31/2013 Interest in the subsidary @100% Canadian Dollar Exchange Rate US Dollar $5,250.00 $5,277.77 $5,166.18 $5,182.61 Gain/Loss $5,277.77 $5,166.18 $5,182.61 $4,874.40 1.00529 0.978857 1.003179 0.940531 Total ($27.77) $111.59 ($16.42) $308.20 $375.60 Bond Amortization Date Cash (CR.) 1/1/2013 12/31/2013 12/31/2014 12/31/2015 12/31/2016 12/31/2017 Amoritaztion @ 8% Interest Expense (Dr.) 1 0.9259 0.8573 0.7938 0.7350 0.6806 60,000 60,000 60,000 60,000 60,000 Unamortized Premium (Dr.) 0 55555.56 51440.33 47629.93 44101.79 40834.99 0 4444.44 8559.67 12370.07 15898.21 19165.01 Journal Entries Date 1/1/2013 Reacquisition price of bond Gain on redemption Par value of bonds Unamortized Premium Info Amount $647,912.52 $12,524.88 Amount $600,000 $60,437.40 12/31/2013 Interest Expense Premium on Bonds payable Cash 55555.56 4444.44 60000.00 Lease Amortization Date Principle Payment 1/1/2013 1/1/2014 1/1/2015 1/1/2016 1/1/2017 1/1/2018 Interest @ 9% on Previous Balance 10,000 10,000 10,000 10,000 10,000 10,000 Reduction of Principle $3,780.00 $3,220.20 $2,610.02 $1,944.92 $1,219.96 $429.76 Journal Entries Date Info 2013 Fixed asset account 1/1/2013 Capital Lease Liability $6,220.00 $6,779.80 $7,389.98 $8,055.08 $8,780.04 $9,570.24 Amount Principle Balance $42,000.00 $35,780.00 $29,000.20 $21,610.22 $13,555.14 $4,775.10 ($4,795.14) Amount $42,000 $42,000 1/1/2013 Capital Lease Liability Interest Expense Cash $6,220.00 $3,780.00 10,000 Journal Entry Debt Restructure Date Info 2013 1/1/2013 Notes Payable Interest Payable Property (Land) Gain on Property Disposition Gain on Restructuring of Debt Updated Notes: Interest Payable: Notes value * interest rate * remaining years = 4,000,000*5*10% Gain on Property disposition = Fair value - book value (3,500,000 - 2,950,000) Gain on Restructuring of Debt = (Notes Payable + Interest Payble) - (Land Value + Gain on land) = (4,000,000+2,000,000) - (2,950,000+550,000) Amount Amount 4,000,000 2,000,000 2,950,000 550,000 2,500,000 Book Value of Bonds $647,912.52 $643,468.08 $634,908.40 $622,538.34 $606,640.13 $587,475.12