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The comparative balance sheet of Connie Jo Company, for December 31, Years 1 and 2 ended December 31 appears below in condensed form: Year 2
The comparative balance sheet of Connie Jo Company, for December 31, Years 1 and 2 ended December 31 appears below in condensed form: Year 2 Year 1 Assets Cash $45,000 $53,500 Accounts receivable (net) 51,300 58,000 Inventories 147,200 135,000 Investments 60,000 Equipment 493,000 375,000 Accumulated depreciation equipment (113,700) (128,000) $553,500 Total assets $622,800 Liabilities and Stockholders' Equity Accounts payable Bonds payable, due Year 4 $61,500 $42,600 0 100,000 Common stock, $10 par 200,000 250,000 75,000 Paid-in capital in excess of par-common stock 50,000 Retained earnings 236,300 160,900 Total liabilities and stockholders' equity $622,800 $553,500 The income statement for the current year is as follows: Sales $629,700 Cost of goods sold 341,800 Gross profit $287,900 Operating expenses: Depreciation expense $ 24,700 Other operating expenses 75,300 Total operating expenses 100,000 Income from operations $187,900 Other income: Gain on sale of investment $5,000 Other expense: Interest expense 12,000 (7,000) Income before income tax $180,900 Income tax 64,100 Net income $116,800 Additional data for the current year are as follows: a. Fully depreciated equipment costing $39,000 was scrapped, no salvage, and equipment was purchased for $157,000. b. Bonds payable for $100,000 were retired by payment at their face amount. c. 5,000 shares of common stock were issued at $15 for cash. d. Cash dividends declared were paid $41,400. e. All sales are on account. Prepare a statement of cash flows, using the indirect method of reporting cash flows from operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments
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