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This is all one question, is asking to prepare a statement of cash flow using the indirect method. Problem 12-18A Using financial statements to prepare
This is all one question, is asking to prepare a statement of cash flow using the indirect method.
Problem 12-18A Using financial statements to prepare a statement of cash flows-Indirect method LO 12-1, 12-3, 12-4 The comparative balance sheets and income statements for Gypsy Company follow Balance Sheets As of December 31 2017 2016 Assets Cash Accounts receivable Inventory $21,745 $ 2,529 1,234 6,177 2,057 6,589 Equipment 22,357 42,887 Accumulated depreciation-equipment (11,552) (18,305) Land 21,042 9,982 Total assets $ 62,238$ 44,504 Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings $ 2,669 $ 4,311 6,571 12,000 21,622 2,875 26,200 30,494 Total liabilities and equity $ 62,238$ 44,504 Income Statement For the Year Ended December 31, 2017 Sales revenue Cost of goods sold $ 34,660 (13,738) Gross margin Depreciation expense 20,922 (3,638) Operating income Gain on sale of equipment Loss on disposal of land 17,284 500 Net income $17,744 Additional Data 1. During 2017, the company sold equipment for $18,109; it had originally cost $28,000. Accumulated depreciation on this equipment was $10,391 at the time of the sale. Also, the company purchased equipment for $7,470 cash 2. The company sold land that had cost $3,140. This land was sold for $3,100, resulting in the recognition of a $40 loss. Also, common stock was issued in exchange for title to land that was valued at $14,200 at the time of exchange 3. Paid dividends of $8,872. Required Prepare a statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.) GYPSY COMPANY Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities 17,744 et income Less: Increases in current assets and Decreases in current liabilities Increase in accounts receivable Increase in inventory Depreciation expense Plus: Noncash charges 17,744 Cash flows from investing activities Proceeds from sale of equipment Proceeds from sale of land Cash flows from financing activities Paid for dividends Repayment of debt 17,744 17,744 Ending cash balance Schedule of noncash investing and financing activities Issued common stock for landStep by Step Solution
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