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Vaughn Manufacturing has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have
Vaughn Manufacturing has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Vaughn Manufacturing for 2022 and 2021 are provided below. BALANCE SHEETS 12/31/22 12/31/21 Cash $408000 $ 192000 Accounts receivable 359000 216000 Inventory 382000 482000 Property, plant and equipment $606000 $962000 Less accumulated depreciation (320000) 286000 (302000) 660000 $1435000 $1550000 Accounts payable $ 177000 $ 94000 Income taxes payable 350000 394000 Bonds payable 362000 602000 Common stock 216000 216000 Retained earnings 330000 244000 $1435000 $1550000 INCOME STATEMENT For the Year Ended December 31, 2022 Sales revenue $8400000 Cost of sales 7150000 Gross profit 1250000 Selling expenses $601000 Administrative expenses 192000 793000 Income from operations 457000 Interest expense 73000 Income before taxes 384000 Income taxes 97000 Net income $ 287000 The following additional data were provided: 1. Dividends for the year 2022 were $201000. 2. During the year, equipment was sold for $238000. This equipment cost $354000 originally and had a book value of $286000 at the time of sale. The loss on sale was incorrectly charged to cost of sales. 3. All depreciation expense is in the selling expense category. The net cash provided (used) by financing activities is O $201000. $(441000). O $48000 O $(244000)
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