Harlan Mining Co. 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 Harlan Mining Co. for 2015 and 2014 are provided below. BALANCE SHEETS 12/31/15 12/31/14 Cash $306,000 $144,000 Accounts receivable 270,000 162,000 Inventory 288,000 360,000 PPE $456,000 $720,000 Less: acc. dep.(240,000) 216,000 (228,000) 492,000 $1,080,000 $1,158,000 Accounts payable $ 132,000 $ 72,000 Income taxes payable 264,000 294,000 Bonds payable 270,000 450,000 Common stock 162,000 162,000 Retained earnings 252,000 180,000 $1,080,000 $1,158,000 INCOME STATEMENT For the Year Ended December 31, 2015 Sales revenue $6,300,000 Cost of sales (5,364,000) Gross profit 936,000 Selling expenses $450,000 Administrative expenses 144,000 (594,000) Income from operations 342,000 Interest expense (54,000) Income before taxes 288,000 Income taxes (72,000) Net income $ 216,000 The following additional data were provided: 1.Dividends for the year 2015 were $144,000. 2.During the year, equipment was sold for $180,000. This equipment cost $264,000 originally and had a book value of $216,000 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. Questions 1 through 5 relate to a statement of cash flows (direct method) for the year ended December 31, 2015, for Harlan Mining Company. 2. The Net Cash provided (used) by investing activites is a. $(264,000). b. $36,000. c. $180,000. d. $(216,000).
Harlan Mining Co. 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 Harlan Mining Co. for 2015 and 2014 are provided below.
BALANCE SHEETS
12/31/15 12/31/14
Cash $306,000 $144,000
Inventory 288,000 360,000
PPE $456,000 $720,000
Less: acc. dep.(240,000) 216,000 (228,000) 492,000
$1,080,000 $1,158,000
Accounts payable $ 132,000 $ 72,000
Income taxes payable 264,000 294,000
Bonds payable 270,000 450,000
Common stock 162,000 162,000
$1,080,000 $1,158,000
INCOME STATEMENT
For the Year Ended December 31, 2015
Sales revenue $6,300,000
Cost of sales (5,364,000)
Gross profit 936,000
Selling expenses $450,000
Administrative expenses 144,000 (594,000)
Income from operations 342,000
Interest expense (54,000)
Income before taxes 288,000
Income taxes (72,000)
Net income $ 216,000
The following additional data were provided:
1.Dividends for the year 2015 were $144,000.
2.During the year, equipment was sold for $180,000. This equipment cost $264,000 originally and had a book value of $216,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.
3.All
Questions 1 through 5 relate to a statement of cash flows (direct method) for the year ended December 31, 2015, for Harlan Mining Company.
2. The Net Cash provided (used) by investing activites is
a. $(264,000).
b. $36,000.
c. $180,000.
d. $(216,000).
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