Required: Using the balance sheet and income statement above, complete the operating section worksheet, a complete statement of cash flows using the indirect method, and a complete statement of cash flows using the direct method.
Required: Using the balance sheet and income statement above, complete the operating section worksheet, a complete statement of cash flows using the indirect method, and a complete statement of cash flows using the direct method.
Cornerstones of Financial Accounting
4th Edition
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Jay Rich, Jeff Jones
Chapter11: The Statement Of Cash Flows
Section: Chapter Questions
Problem 16CE
Related questions
Question
Western Resources | Western Resources | |||||||
Balance Sheet | Income Statement | |||||||
At December 31, 20X5 | For the Period Ended December 31, 20X5 | |||||||
Assets | 20X5 | 20X4 | ||||||
Current assets | Sales Revenue | $ | 34,000,000 | |||||
Cash | $ | 900,000 | $ | 255,000 | Cost of Goods Sold | (29,500,000) | ||
100,000 | 2,500,000 | Gross Profit | $ | 4,500,000 | ||||
Allowance for Doubftul Accounts | (10,000) | (250,000) | ||||||
Inventory | 7,200,000 | 1,950,000 | Operating Expenses: | |||||
Prepaid Rent | 710,000 | 860,000 | Rent Expense | $ | (800,000) | |||
Long-term assets | Utilities Expense | (150,000) | ||||||
Land | $ | 3,975,000 | 4,200,000 | (1,250,000) | ||||
Buildings and Equipment | 8,250,000 | 8,750,000 | (160,000) | |||||
Accumulated Depreciation | (4,250,000) | (3,550,000) | Total Operating Expenses | $ | (2,360,000) | |||
Total assets | $ | 16,875,000 | $ | 14,715,000 | ||||
Liabilities and |
Other: | |||||||
Current liabilities | Interest Expense | $ | (640,000) | |||||
Accounts payable | $ | 2,850,000 | $ | 1,100,000 | Loss on Sale of Building | (100,000) | ||
Interest payable | 490,000 | 400,000 | Gain on Sale of Land | 400,000 | ||||
Income taxes payable | 80,000 | 310,000 | ||||||
Dividends payable | 12,000 | 55,000 | Income Before Income Taxes | $ | 1,800,000 | |||
Long-term liabilities | Income Tax Expense | (720,000) | ||||||
Long-term debt | $ | 2,600,000 | 4,000,000 | Net Income | $ | 1,080,000 | ||
Stockholders' Equity | ||||||||
Common stock | $ | 6,675,000 | 5,600,000 | |||||
4,168,000 | 3,250,000 | |||||||
Total liabilities and shareholders' equity | $ | 16,875,000 | $ | 14,715,000 |
Additional information: The following
Building 700,000
Common Stock 700,000
Required: Using the balance sheet and income statement above, complete the operating section worksheet, a complete statement of cash flows using the indirect method, and a complete statement of cash flows using the direct method.
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