Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2 Swasey Company Comparative Balance Sheets At December 31, 20X1 and 20X2
Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2 Swasey Company Comparative Balance Sheets At December 31, 20X1 and 20X2
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter9: Metric-analysis Of Financial Statements
Section: Chapter Questions
Problem 9.6E
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Question
Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2
Swasey Company
|
Comparative Balance Sheets
|
At December 31, 20X1 and 20X2
|
1
|
|
20X1
|
20X2
|
2
|
Current assets:
|
|
|
3
|
Cash
|
$460,000.00
|
$1,320,000.00
|
4
|
|
$1,500,000.00
|
$1,165,000.00
|
5
|
Inventories
|
600,000.00
|
640,000.00
|
6
|
Long-term assets:
|
|
|
7
|
Plant and equipment
|
4,400,000.00
|
4,300,000.00
|
8
|
|
(2,400,000.00)
|
(2,540,000.00)
|
9
|
Land
|
2,000,000.00
|
2,875,000.00
|
10
|
Total assets
|
$6,560,000.00
|
$7,760,000.00
|
11
|
Current liabilities:
|
|
|
12
|
Wages payable
|
$1,400,000.00
|
$1,030,000.00
|
13
|
Long-term liabilities:
|
|
|
14
|
Bonds payable
|
0.00
|
770,000.00
|
15
|
Mortgage payable
|
200,000.00
|
0.00
|
16
|
Total liabilities
|
1,600,000.00
|
1,800,000.00
|
17
|
|
|
|
18
|
Common stock
|
750,000.00
|
750,000.00
|
19
|
Paid-in capital in excess of par
|
560,000.00
|
560,000.00
|
20
|
|
3,650,000.00
|
4,650,000.00
|
21
|
Total Stockholders’ equity
|
4,960,000.00
|
5,960,000.00
|
22
|
Total liabilities and stockholders’ equity
|
$6,560,000.00
|
$7,760,000.00
|
Swasey Company
|
Income Statement
|
For the Year Ended December 31, 20X2
|
1
|
Revenues
|
$6,000,000.00
|
2
|
Gain on sale of equipment
|
200,000.00
|
3
|
Cost of goods sold
|
(3,840,000.00)
|
4
|
Depreciation expense
|
(540,000.00)
|
5
|
Interest expense
|
(20,000.00)
|
6
|
Net income
|
$1,800,000.00
|
During the year, Swasey Company sold equipment with a book value of $560,000 for $760,000 (original purchase cost of $960,000). New equipment was purchased.
Required: | |
1. | Prepare a statement of cash flows for Swasey for 20X2. |
2. | Reflect on the relationship between the statement of cash flows and the change in cash. |
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