Question
The Henderson Companys financial statements are as follows: Comparative Balance sheet as at December 31, 20x8 20x8 20x7 Cash and cash equivalents $19,700 $25,000 Accounts
The Henderson Companys financial statements are as follows:
Comparative Balance sheet as at December 31, 20x8
20x8 20x7
Cash and cash equivalents $19,700 $25,000
Accounts receivable net 157,840 129,170
Inventory 286,400 307,200
Prepaid expenses 6,800 9,500
Notes receivable 125,031 120,595
PPE 1,241,424 1,125,308
Accumulated depreciation (569,420) (507,360)
FVTOCI Investments 31,000 66,600
$1,298,775 $1,276,013
Statement of Comprehensive Income For the year ended December 31, 20x8
Revenue $1,967,000 Cost of goods sold (865,120) Operating expenses (269,180) Employee benefits expense (291,340) Depreciation expense (147,260) Gain on sale of PPE 11,740 Bad debt expense (6,760) Income tax expense (139,678) Net income 259,402 OCI Fair value loss on FVTOCI Investments (3,000)
Comprehensive Income $256,402
Additional Information
1. The allowance for doubtful accounts at December 31, 20x7 and 20x8 was $3,900 and $5,140 respectively. 2. During the year, a building that cost $130,000 was sold. 3. A total of $1,340 of accounts receivable written off during 20x7 were recovered during 20x8. 4. There is one note receivable outstanding. The note was issued on December 31, 20x6. The face value of the note is $140,000 and is repayable on December 31, 20x11. The note requires interest payment of 2% each December 31st. Interest revenue on the note is included in revenues. 5. One investment classified as FVTOCI was sold. No investments were purchased during the year.
Required Prepare a statement of cash flow for the year ended December 31, 20x8.
Calculate the cash flow from operations using both the indirect and indirect methods.
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