Question
Rowe Publishing Company Balance Sheets December 31, 2019 and 2018 1 2019 2018 2 Assets 3 Current assets: 4 Cash $85,000.00 $66,000.00 5 Accounts receivable
| Rowe Publishing Company |
| Balance Sheets |
| December 31, 2019 and 2018 |
| 1 | 2019 | 2018 | |||
| 2 | Assets | ||||
| 3 | Current assets: | ||||
| 4 | Cash | $85,000.00 | $66,000.00 | ||
| 5 | Accounts receivable | 240,000.00 | 231,000.00 | ||
| 6 | Inventory | 190,000.00 | 170,000.00 | ||
| 7 | Total current assets | $515,000.00 | $467,000.00 | ||
| 8 | Property, plant, and equipment: | ||||
| 9 | Building | $400,000.00 | $400,000.00 | ||
| 10 | Equipment | 155,000.00 | 130,000.00 | ||
| 11 | $555,000.00 | $530,000.00 | |||
| 12 | Accumulated depreciation | (375,000.00) | (350,000.00) | ||
| 13 | Net property, plant, and equipment | 180,000.00 | 180,000.00 | ||
| 14 | Total assets | $695,000.00 | $647,000.00 | ||
| 15 | LIABILITIES AND EQUITY | ||||
| 16 | Current liabilities: | ||||
| 17 | Accounts payable | $133,000.00 | $121,000.00 | ||
| 18 | Salaries payable | 15,000.00 | 11,000.00 | ||
| 19 | Income taxes payable | 10,000.00 | 17,000.00 | ||
| 20 | Total current liabilities | $158,000.00 | $149,000.00 | ||
| 21 | Long-term liabilities: | ||||
| 22 | Notes payable | $115,000.00 | $150,000.00 | ||
| 23 | Bonds payable | 50,000.00 | 0.00 | ||
| 24 | Total long-term liabilities | 165,000.00 | 150,000.00 | ||
| 25 | Total liabilities | $323,000.00 | $299,000.00 | ||
| 26 | Equity: | ||||
| 27 | Common stock | $300,000.00 | $300,000.00 | ||
| 28 | Retained earnings | 72,000.00 | 48,000.00 | ||
| 29 | Total equity | 372,000.00 | 348,000.00 | ||
| 30 | Total liabilities and equity | $695,000.00 | $647,000.00 |
| Required: | |
| Prepare a statement of cash flows for 2019, using the direct method to determine net cash flow from operating activities. |
Additional Information:
| 1. | No buildings or equipment were sold during 2019. Equipment was purchased for $25,000 cash. |
| 2. | Notes payable in the amount of $35,000 were repaid during 2019. |
| 3. | Bonds payable of $50,000 were issued for cash during 2019. |
| 4. | Rowe Publishing declared and paid dividends of $35,000 during 2019. |
| Rowe Publishing Company |
| Income Statement |
| For the year ended December 31, 2019 |
| 1 | Sales |
| $1,051,000.00 |
| 2 | Less: Cost of goods sold |
| (578,000.00) |
| 3 | Gross margin |
| $473,000.00 |
| 4 | Less operating expenses: |
|
|
| 5 | Salaries | $(351,000.00) |
|
| 6 | Depreciation | (25,000.00) | (376,000.00) |
| 7 | Income from operations |
| $97,000.00 |
| 8 | Less: Interest expense |
| (16,000.00) |
| 9 | Income before taxes |
| $81,000.00 |
| 10 | Less: Income taxes expense |
| (22,000.00) |
| 11 | Net income |
| $59,000.00
|
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Income Tax Fundamentals 2013
Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill
31st Edition
9781285586618
