Question
Statement of Cash Flows (Indirect Method) The Sweet Company's income statement and comparative balance sheets as of December 31 of 2013 and 2012 are presented
Statement of Cash Flows (Indirect Method) The Sweet Company's income statement and comparative balance sheets as of December 31 of 2013 and 2012 are presented below:
SWEET COMPANY Income Statement For the Year Ended December 31, 2013 | ||
---|---|---|
Sales Revenue | $1,324,400 | |
Cost of Goods Sold | $709,800 | |
Wages Expense | 284,200 | |
Depreciation Expense | 84,000 | |
Insurance Expense | 18,200 | |
Interest Expense | 16,800 | |
Income Tax Expense | 79,800 | |
Gain on Sale of Equipment | (22,400) | 1,170,400 |
Net Income | $154,000 |
SWEET COMPANY Balance Sheets | ||
---|---|---|
Dec. 31, 2013 | Dec. 31, 2012 | |
Assets | ||
Cash | $32,200 | $43,400 |
Accounts Receivable | 95,200 | 60,200 |
Inventory | 247,800 | 176,400 |
Prepaid Insurance | 12,600 | 15,400 |
Plant Assets | 1,241,800 | 1,078,000 |
Accumulated Depreciation | (264,600) | (245,000) |
Total Assets | $1,365,000 | $1,128,400 |
Liabilities and Stockholders' Equity | ||
Accounts Payable | $51,800 | $37,800 |
Interest Payable | 7,000 | - |
Income Tax Payable | 16,800 | 22,400 |
Bonds Payable | 189,000 | 112,000 |
Common Stock | 924,000 | 819,000 |
Retained Earnings | 249,200 | 137,200 |
Treasury Stock | (72,800) | - |
Total Liabilities and Stockholders' Equity | $1,365,000 | $1,128,400 |
During the year, Sweet Company sold equipment for $37,800 cash that originally cost $79,800 and had $64,400 accumulated depreciation. New equipment was purchased for cash. Bonds payable and common stock were issued for cash. Cash dividends of $42,000 were declared and paid. At the end of the year, shares of treasury stock were purchased for cash. Accounts payable relate to merchandise purchases. Required a. Compute the change in cash that occurred during 2013. b. Prepare a statement of cash flows using the indirect method.
Change is Cash during 2013 $ b. Use a negative sign with cash outflow answers. Cash Flow from Operating Activities Net Loss Add (decuct) items to convert net income to cash basis Depreciation Franchise Amortization Loss on Sale of Equipment Gain on Sale of Equipment Accounts Receivable Inventory Prepaid Insurance Accounts Payable Interest Payable Income Tax Payable Cash Flow from Investing Activities Sale of Equipment Purchase of Equipment Cash Used by Investing Activities Cash Flow from Financing Activities Issuance of Bonds Payable Purchase of Common Stock Payment of Dividends Purchase of Treasury Stock Cash Provided by Financing Activities Net in Cash Cash at Beginning of Year Cash at End of Year in Cash Cash at Beginning of Year Cash at End of YearStep by Step Solution
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