Simple Things Industries Ltd. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/(Decrease) Assets Cash 190,000 30,000 ? Accounts Receivable 220,000 230,000 ? Supplies 340,000 310,000 ? Prepaid expenses 10,000 30,000 ? Intangible assets 90,000 90,000 ? Equipment, net 900,000 790,000 ? Total Assets 1,750,000 1,480,000 ? Liabilities Accounts payable 140,000 90,000 ? Accrued liabilities 160,000 190,000 ? Income tax payable 140,000 120,000 ? Long-term notes payable 450,000 500,000 ? Stockholders' Equity Common Stock 310,000 200,000 ? Retained earnings 640,000 400,000 ? Treasury stock (90,000) (20,000) ? Total liabilities and stockholders' equity 1,750,000 1,480,000 ? Simple Things Industries Ltd Income Statement Year Ended December 31,2014 Revenues and gains: Sales revenue 1,900,000 Gain on sale of Equipment 60,000 Total revenues and gains 1,960,000 Expenses Cost of goods sold 850,000 Depreciation expense 190,000 Other operating expense 360,000 Total expenses 1,400,000 Income before income taxes 560,000 Income tax expense 180,000 Net Income 380,000 Notes : Acquisition of Equipment during 2014 450,000 Sale proceed from sale of Equipment 210,000 Receipt for issuance of notes payable 50,000 Payment for note payable 100,000 Dividend paid 140,000 Book value of equipment sold 150,000 Requirements 1. 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. 2. Which category of the statement of cash flow is considered as the most important? Why? 3. Prepare a complete statement of cash flows for 2014 using the indirect method
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Simple Things Industries Ltd. |
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Comparative Balance Sheet |
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December 31, 2014 and 2013 |
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2014 |
2013 |
Increase/(Decrease) |
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Assets |
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Cash |
190,000 |
30,000 |
? |
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Accounts Receivable |
220,000 |
230,000 |
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Supplies |
340,000 |
310,000 |
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Prepaid expenses |
10,000 |
30,000 |
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Intangible assets |
90,000 |
90,000 |
? |
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Equipment, net |
900,000 |
790,000 |
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Total Assets |
1,750,000 |
1,480,000 |
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Liabilities |
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Accounts payable |
140,000 |
90,000 |
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Accrued liabilities |
160,000 |
190,000 |
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Income tax payable |
140,000 |
120,000 |
? |
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Long-term notes payable |
450,000 |
500,000 |
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Stockholders' Equity |
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Common Stock |
310,000 |
200,000 |
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640,000 |
400,000 |
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(90,000) |
(20,000) |
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Total liabilities and stockholders' equity |
1,750,000 |
1,480,000 |
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Simple Things Industries Ltd |
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Income Statement |
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Year Ended December 31,2014 |
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Revenues and gains: |
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Sales revenue |
1,900,000 |
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Gain on sale of Equipment |
60,000 |
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Total revenues and gains |
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1,960,000 |
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Expenses |
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Cost of goods sold |
850,000 |
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190,000 |
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Other operating expense |
360,000 |
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Total expenses |
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1,400,000 |
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Income before income taxes |
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560,000 |
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Income tax expense |
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180,000 |
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Net Income |
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380,000 |
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Notes : |
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Acquisition of Equipment during 2014 |
450,000 |
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Sale proceed from sale of Equipment |
210,000 |
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Receipt for issuance of notes payable |
50,000 |
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Payment for note payable |
100,000 |
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Dividend paid |
140,000 |
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Book value of equipment sold |
150,000 |
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Requirements
1. 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.
2. Which category of the statement of cash flow is considered as the most important? Why?
3. Prepare a complete statement of
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