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The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The
The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized. |
Current Year | Prior Year | |||||
Balance Sheet | ||||||
Assets | ||||||
Cash | $ | 112,500 | $ | 130,500 | ||
Accounts Receivable | 140,000 | 122,500 | ||||
Merchandise Inventory | 105,000 | 113,750 | ||||
Property and Equipment | 200,000 | 105,000 | ||||
Less: Accumulated Depreciation | (58,000 | ) | (30,000 | ) | ||
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Total Assets | $ | 499,500 | $ | 441,750 | ||
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Liabilities: | ||||||
Accounts Payable | $ | 17,500 | $ | 21,000 | ||
Salaries and Wages Payable | 3,500 | 1,750 | ||||
Notes Payable, Long-Term | 87,500 | 105,000 | ||||
Stockholders Equity: | ||||||
Common Stock | 160,000 | 140,000 | ||||
Retained Earnings | 231,000 | 174,000 | ||||
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Total Liabilities and Stockholders Equity | $ | 499,500 | $ | 441,750 | ||
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Current Year |
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Income Statement | ||||||
Sales | $ | 500,000 | ||||
Cost of Goods Sold | 260,000 | |||||
Depreciation Expense | 28,000 | |||||
Other Expenses | 125,000 | |||||
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Net income | $ | 87,000 | ||||
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Other information from the companys records includes the following: |
| Bought equipment for cash, $95,000. |
| Paid $17,500 on long-term note payable. |
| Issued new shares of common stock for $20,000 cash. |
| Cash dividends of $30,000 were declared and paid to stockholders. |
| Accounts Payable arose from inventory purchases on credit. |
| Income Tax Expense ($4,000) and Interest Expense ($3,000) were paid in full at the end of both years and are included in Other Expenses. |
Required:
Prepare a schedule summarizing operating, investing, and financing cash flows using the T-account approach. |
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