Question
The comparative balance sheets of Donna Dunn Design Studio, Inc., at June 30, 2018, and 2017, and transaction data for fiscal 2018, are as follows:
The comparative balance sheets of Donna Dunn Design Studio, Inc., at June 30, 2018, and 2017, and transaction data for fiscal 2018, are as follows:
Requirement 1. Prepare the statement of cash flows of Donna Dunn Design studio for the year ended June 30, 2018, using the indirect method to report operating activities. Also prepare the accompanying schedule of noncash investing and financing activities. All current account changes except for the short term Notes payable changes result from operating transactions.
Requirement 2. Prepare a supplementary schedule showing cash flows from operations using the direct method. The accounting records provide the following: collections from customers, $261.000; interest received, $1,000; payments for income tax, $1,300; and payment of interest, $5,600.
2018 2017 Decrease) Current assets: Cash $ 28,000 $ 12,200 $ Accounts receivable 28,100 22.100 Inventories 15,800 6,000 57,800 (1,700) (70,800) Prepaid expenses Land 98,200 40,400 700 2,400 29,000 99,800 74,200 73.100 19,500 1,000 $ 277,700 $ 251,000 $ Equipment, net 1,100 18,500 Long-term investment 26,700 Current liabilities: Notes payable, short-term $ 13,500 $ 29,000 Accounts payable 13,400 Income tax payable Accrued liabilities Interest payable Salary payable Long-term note pavable 18,700 22,900 $ 40,400 14,500 9,400 2,700 3,000 93.800 (9,400) (11,400) (1,100) 9,300 1,000 3,700 4,800 47.200 1,800 (46.600) Common stock 69,300 78,100 51,200 13,100 18,100 65,000 Retained earnings $ 277,700 $ 251,000 $ 26,700 Transaction data for the year ended June 30, 2018, follows: a. Net income, $72,000 b. Depreciation expense on equipment, $13,800 c. Purchased a long-term investment with cash, $18,500 d. Sold land for $64,200, including a $6,600 loss e. Acquired equipment by issuing a long-term note payable, $14,900 f. Paid off a long-term note payable, $61,500 g. Received cash for the issuance of common stock, $8,700 h. Paid cash dividends, $7,000 i. Paid off a short-term note payable by issuing common stock, $9,400
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