Question

Scenario:

The 2014 comparative balance sheet and 2014 income statement of Conrad Co Ltd, have just been distributed at a meeting of the company’s board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors.

Conrad Industries Ltd.

Comparative Balance Sheet

December 31, 2014 and 2013

 

2014

2013

Increase/(Decrease)

       Assets

 

 

 

   Cash

     238,000

       215,200

?

   Accounts Receivable

     303,200

       259,300

?

   Inventories

     358,300

       348,200

?

   Prepaid expenses

       35,350

           43,100

?

   Intangible assets

     205,000

       205,000

?

Plant assets, net

1,105,000

       910,000

?

Total Assets

2,244,850

     1,980,800

 

     Liabilities

 

 

 

   Accounts payable

     254,300

       240,000

?

   Accrued liabilities

     415,300

       410,000

?

   Income tax payable

     115,000

       135,400

?

Long-term notes payable

     845,400

       910,500

?

     Stockholders' Equity

 

 

 

Common Stock

     295,500

       275,300

?

Retained earnings

     345,600

       295,400

?

Treasury stock

       (26,250)

       (285,800)

?

Total liabilities and stockholders' equity

2,244,850

     1,980,800

 

 

Conrad Industries Ltd

Income Statement

Year Ended December 31,2014

Revenues and gains:

 

 

   Sales revenue

2,224,000

 

   Gain on sale of plant assets

     115,500

 

     Total revenues and gains

 

     2,339,500

Expenses

 

 

   Cost of goods sold

1,305,000

 

   Depreciation expense

     165,400

 

   Other operating expense

     405,400

 

     Total expenses

 

     1,875,800

Income before income taxes

 

        463,700

Income tax expense

 

     265,000

Net Income

 

       198,700

 

 

Notes

   

Acquisition of plant asset during 2014

 

       600,900

Sale proceed from sale of plant asset

 

       356,000

Receipt for issuance of notes payable

 

       384,900

Payment for note payable

 

     450,000

Dividend paid

 

       148,500

Book value of equipment sold

 

       240,500

 

Requirements

  • Reconstruct the company’s comparative balance sheet for 2013/2014 using the information and compute and show the missing figures to include the appropriate sign as a positive or negative figure.

 

  • Which category of the statement of cash flow is considered as the most important? Why?

 

  • Prepare a complete statement of cash flows for 2014 using the indirect method.

Expert Answer

Want to see the step-by-step answer?

Check out a sample Q&A here.

Want to see this answer and more?

Experts are waiting 24/7 to provide step-by-step solutions in as fast as 30 minutes!*

*Response times may vary by subject and question complexity. Median response time is 34 minutes for paid subscribers and may be longer for promotional offers.
Tagged in
Business
Accounting

Accounting Functions

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: Supply the missing data in the following cases. Each case is independent of the others. Case 2 Sched...

A: Workings:   Case :1 Direct Labor:  Total Manufacturing costs – [Direct Materials + Direct Labor] $1...

Q: Direct Labor Cost Budget Dauber Inc. budgeted production of 66,000 personal journals in 20Y6. Each j...

A: Total time required for production of personal journals  = No. of journals x Time required for one j...

Q: Problem 8-5 Bridgeport Limited stocks a variety of sports equipment for sale to institutions. The fo...

A: Inventory: Inventory is the goods and material a business holds for sale. There are two methods for ...

Q: The following totals appear in the day books for March 20X8. $ Sales day book 40,000 Purchases day b...

A: We have the following information: Sales day book: $40,000 Purchases day book: $20,000 Returns inwa...

Q: Plotner Corporation has the following trading portfolio of stock investments as of December 31, 2019...

A: Following are the solutions to requisite problems

Q: Prepare journal entries to record the following business transaction and related adjusting entry. If...

A: Journal entry is recording or posting of the business transactions in the books of accounts of the c...

Q: Canada Golf Club (CGC) is considering three independent projects for July 2021 tournament. The three...

A: The payback period refers to the time period that is required to recover the initial cost. With the ...

Q: From the following transactions for BlackJade Company, find the required balances for the month ende...

A: Cash basis accounting: In cash basis accounting , revenue are recognized when payment is received an...

Q: The 2014 comparative balance sheet and 2014 income statement of Byfield Co Ltd, have just been distr...

A: Cash flow statement: It is a statement which reports the cash inflows and outflows of a business dur...

Q: Love Co. sold merchandise to Kind Co. on account, P35,000, terms 2/15, net 45. The cost of the merch...

A: Cost of goods sold less return=Cost of goods sold-Return=P 24,500-P1,700=P 22,800

Q: Catherine Company acquired a coal mine at a cost of P25,000,000. Intangible development cost totaled...

A:   Depletion rate:   To compute a unit depletion rate, subtract the salvage value of the asset from t...

Q: Resources' requirements, standard pounds per unit Resources' standard price, per pound Units produce...

A: Formula: Direct materials price variance = ( Standard price - actual price ) x Actual quantity. Dedu...

Q: List two factors F. Raser should consider in deciding whether to raise finance by issuing loan notes...

A: Financing decisions are very important for a firm /company. Financing decisions relates to selection...

Q: The 2014 comparative balance sheet and 2014 income statement of Byfield Co Ltd, have just been distr...

A: Cash flow statement: It is a statement which reports the cash inflows and outflows of a business dur...

Q: The following was taken from Stickers Corp.’s accounting records for the year ended December 31, 201...

A: Raw material used = Raw material purchased - Increase in raw material inventory

Q: Explain the similarities between a job order and a process cost system and features of process cost ...

A: Click to see the answer

Q: During the current year, merchandise is sold for P86,000 cash and for P93,950 on account. The cost o...

A: Gross profit = Sales - Cost of merchandise sold. First, compute the total sales as shown below:

Q: I need help with this Cash flow. Also explanatuon for the answers. Using the Indirect method

A: A financial statement that summarises the amount of cash and cash equivalents entering and exiting a...

Q: Please explain the impact on the balance sheet when the board of directors declares a cash common so...

A: Out of the profit earned by the company, some of them is distributed to the stakeholders of the comp...

Q: Cost of sales Food and beverages $500,000 Shirts and caps $25,000 Other Expenses Administrative $30,...

A:         Operating statement is also termed as income statement where it shows the company's income a...

Q: Erza Company has a P180,000, 10%, 90-day note receivable outstanding at December 31. The note is dat...

A: Interest receivable is interest accrued but not received. Interest receivable is an asset. Increase ...

Q: Hi, I need help with this. It is just for practice for myself

A: Inventory: It refers to the items held by an organization which were in various forms like raw mater...

Q: Which of the folowing tax items is of most value in terms of tax savings to a taxpayer? Choose the c...

A: Taxable income: It is the gross total income on which the taxes are imposed by the government for a ...

Q: Journalize the following adjustments. (Credit account titles are automatically indented when amount ...

A: Adjusting entries: These entries are passed at the end of the year under the accrual based accountin...

Q: Prepare journal entries to record the following adjustments. If an amount box does not require an en...

A: Journal entries:-  Journal entries are the initial entries that are recorded in the books of account...

Q: MFRS 138- intangible assets What improvements could possible made in order to settle down the issues...

A: “Since you have posted a question with many sub-parts, we will solve three sub-parts for you. To get...

Q: Michael Company purchased goods worth P7,500. Term: n/30, FOB Shipping point, Freight Prepaid. Entry...

A: FOB Shipping Point, Freight Prepaid means that that the buyer is responsible for the freight charge ...

Q: Required information[The following information applies to the questions displayedbelow.]Silver Compa...

A: Since you have posted a question with multiple sub-parts, we will solve the first three sub-parts fo...

Q: I am having issues with medical expenses deduction and credits. With medical expenses wrong, it thro...

A: Gifts are not taxable if received from any blood relative Thus, gift received is not taxable. Credit...

Q: The following is extracted from the books of White Co as at 31 December 2019: Net current assets 6 0...

A: Formula: Capital = Assets - Liabilities. Deduction of liabilities from Assets derives the capital.

Q: North Star is trying to determine its optimal capital structure, which now consists of only common e...

A: For calculating interest expenses for each capital structure , we need to find out total debt financ...

Q: Oasis Company adds all materials at the beginning of itsmanufacturing process. Production informatio...

A:                     beginning       ending         work in process       working process       ...

Q: Required information [The following information applies to the questions displayed below.]Sandra’s P...

A: Inventory: It refers to the items held by an organization which were in various forms like raw mater...

Q: The income and expense accounts of Rosie Corp. for the year ended 2019 are listed below. Sales 1,150...

A: For calculating closing capital , we need to have opening capital , addition to capital , withdrawal...

Q: Lower-of-Cost-or-Market Inventory On the basis of the following data, determine the value of the inv...

A: Total cost = Inventory Quantity x  Cost per Unit Total Market = Inventory Quantity x Market Value pe...

Q: The impairment amount recognised depends on whether or not the financial instruments have significan...

A: Financial instrument: Financial instrument can be defined as the document that reflects a legal agre...

Q: From the following Company A adjusted trial balance, prepare simple financial statements, as follows...

A: A)

Q: CPA Services - Profitability Analysis Hy and Lowe is a public accounting firm that offers two primar...

A: Solution: Traditional costing is the more simplest method which typically delivers less accuracy in ...

Q: [The following information applies to the questions displayedbelow.]We discuss how to prepare the di...

A: Formulae for budgeted manufacturing over head rate=budgeted manufacturing overhead cost/budgeted dir...

Q: The following information is available for Pioneer Company:Sales price per unit is $100.November and...

A: Particulars November December Budgeted Sales unit 3140 3540 Sales price per unit $...

Q: Stanley Company sold office equipment that had a book value of $12,000 for $16,000. The office equip...

A: Depreciation is a reduction in the value of assets due to the usage of that asset. We can evaluate t...

Q: Why is absorption costing the method allowable for GAAP yet managers prefer variable costing

A: In variable costing only variable costs are included in the product cost. Fixed costs re considered ...

Q: Hello question is attached, thanks.

A: Formula: Contribution margin = sales - Variable cost. Deduction of variable cost from sales derives ...

Q: From the following transactions for Casio Company, find the required balances for the month ended No...

A: Cash basis accounting: In cash basis accounting , revenue are recognized when payment is received an...

Q: Theta prepares its financial statements for the year to 30 April each year. The company pays rent fo...

A: Monthly rent until 30 June 2000 = Total yearly rent / 12 months = P84,000 / 12 months = P7,000 Month...

Q: 1.  why companies need to transfer price and advantages? 2. explain the transfer pricing method that...

A: Hello. Since your question has multiple parts, we will solve the first question for you. If you want...

Q: Current Portion of Long-Term Debt PepsiCo, Inc., reported the following information about its long-t...

A: Long-term debt is those which are payable in more than one year.it includes notes payable, borrowing...

Q: Traf Enterprises incorporated on May 3, 2011. The company engaged in the following transactionsdurin...

A: Following are the requisite journal entries, Ledger accounts and Trial Balance