The 2014 comparative balance sheet and 2014 income statement of Bradshaw and Fran 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. Bradshaw and Fran 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     Bradshaw & Fran  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.

Question

Scenario:

The 2014 comparative balance sheet and 2014 income statement of Bradshaw and Fran 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.

Bradshaw and Fran 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

 

 

Bradshaw & Fran  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 For Decision Making

Financial Accounting

Final Accounts for Companies

Final Accounts

Related Accounting Q&A

Find answers to questions asked by students like you.

Q: What is the answer to the question I uploaded

A: Variances occur when the actual inputs and outputs used are different and the variance may be favora...

Q: On April 1, Year 1, Brandi Corporation issued $20,000,000 of 5-year, 9% bondsat a market interest ra...

A: Premium on Bonds Payable = Issue value of bonds - Face value of Bonds = $20,811,010 - $20,000,000 = ...

Q: Comparative Balance Sheet as at DEcember 31 2014 and 2013   2014 2013 Increase/(Decrease) ...

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

Q: journalizing transactions and providing and ruling a journal

A: As you have posted multiple independent questions, we are answering the first question. Kindly repos...

Q: We discuss how to prepare the different component budgets of theoperating budget, including the sale...

A: Cost of goods sold : It is calculated by multiplying the units sold with the product cost per unit.

Q: On April 1, Year 1, Brandi Corporation issued $20,000,000 of 5-year, 9% bondsat a market interest ra...

A: Premium on Bonds Payable = Issue value of bonds - Face value of Bonds = $20,811,010 - $20,000,000 = ...

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: Listed below are body temperatures from five different subjects measured at 8 AM and again Temperatu...

A:           Temperature is a degree of hotness and coldness measured with a thermometer . 

Q: Kelvin is a Malaysian who had acquired condominium for RM550,000 on 14th January 2010 and incurred R...

A: Gifts Tax is the tax payable by the donor when a gift of more than the standard applicable limit of ...

Q: Horizontal analysis of income statement For 20Y2, McDade Company reported a decline in net income. A...

A: Horizontal analysis is prepared to calculate the variance from previous year by showing increase/dec...

Q: Please solve 1,2,3 based on the data given. As typical of a start-up business, PNW, LLC expects to g...

A: Depreciation is charged on the fixed assets due to their continuous use or due to wear and tear of t...

Q: The Estrella-Pantaleon Bridge connecting Estrella, Makati City to Barangka Drive in Mandaluyong is a...

A: Given: Length of bridge= 506 metres Width= 6.7 metres Cost of asphalt overlay= 11,000 PhP (Philippin...

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

A: Comparative statement is the one that shows the variation between the amounts of balance sheet items...

Q: On December 1, 20x1, CANOROUS Co. granted a 5-year franchise right to MELODIOUS, Inc. for an initial...

A: On December 01, 20x1 CANOROUS Co. granted a franchise right to MELODIOUS Inc. Initial fees = P400000...

Q: 11 Partners Chung, Detoya, and Digao share profits and losses in a 3:1:2 ratio, respectively. Detoya...

A: As posted multiple independent questions we are answering only first question kindly repost the unan...

Q: sub-part 4 for question    Silver Company manufactures kites and has the followinginformation availa...

A: 1) Calculation number of physical units worked on during the period. Physical units   Physical un...

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: Given the following income statement for OR company for 20X4:                 Sales (30,000 units)  ...

A: Break-even point = Fixed cost/Profit volume ratio Profit volume ratio = (Sales - Variable cost)/Sale...

Q: Which of the following is not one of the main issues regarding data collection which can significant...

A: Data collection is one of the modt fundamental and important steps in any statistical analysis. If t...

Q: Wallace Inc. collects 90% of its sales on account in the month of the sale and 10% in the month foll...

A: Cash collection from September sales = September sales on credit x 10% = $276,000 x 10% = $27,600

Q: Perpetual Inventory Using FIFO Beginning inventory, purchases, and sales for Item Delta are as follo...

A: The inventory valuation method used to evaluate the closing inventory and cost of goods sold on the ...

Q: Explain what accounting documents you must supply to the auditors. What are the statutory audit requ...

A: The auditor is responsible for the identification of the fraud and errors present in the financial s...

Q: On April 1, Year 1, Brandi Corporation issued $20,000,000 of 5-year, 9% bondsat a market interest ra...

A: Bonds:   Bonds are the financial debt instruments issued by the corporations to raise capital for t...

Q: : The Fashion Shoe Company operates a chain of women’s shoe shops that carry many styles ofshoes tha...

A: Selling price per unit: It is the price at which a product is sold in the market. The selling price ...

Q: Humble Co. sells merchandise on credit to Wise Co in the amount of P9,600. The invoice is dated on A...

A: ''1/ 15'' means the buyer can take 1 % discount advantages,if he pays the dues with in 15 days/

Q: These items are taken from the financial statements of Oriole Co. at December 31, 2022. Buildings$11...

A: Formula: Net Income = Total Revenues - expenses Deduction of expenses from Revenues derives the Net ...

Q: The 2014 comparative balance sheet and 2014 income statement of Simple Things Industries Ltd, have j...

A:     While preparing Cash Flow Statement as per Indirect Method, Net Profit/Loss for the period is us...

Q: Calculate the $ change from2018- 2019

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

Q: Times interest earned A company reports the following: Income before income tax expense $3,120,00...

A: Ratio analysis is a method of measuring the financial position of the organization with different ki...

Q: PROBLEM 8: Lease agreement with VARIABLE PAYMENTS Li Zi Company entered into a lease of building on ...

A: On 01.01.2020, Li Zi company entered into lease of building  Lease term = 10 years Useful life of le...

Q: An alternative concept of fairness in cost allocation, absent the cause-and-effect basis, includes: ...

A: Cost allocation is dividing of all indirect cost between all cost objects based on the resources use...

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: Bert has extracted the following list of balances from his general ledger at 31 October 20X5: $ Sale...

A: We have the following information: Sales: $258,542 Opening inventory: $9,649 Purchases: $142,958 Ex...

Q: IKIBAN INC.Comparative Balance SheetsJune 30, 2019 and 2018   2019     2018     Assets          ...

A: Cash flow statement: It is prepared to show the cash flow of the organization by analyzing the total...

Q: Prepare an adjusted trial balance from the following account information, considering the adjustment...

A: Adjusted trial balance includes both temporary accounts and permanent accounts. All expenses, losses...

Q: The following materials standards have been established for a particular product:     Standard ...

A: Material quantity variance = (Actual quantity used - Standard quantity allowed)*Standard rate per po...

Q: Hello, I need formulas explaining the answers, thank you.

A: Dividend distribution is a method of distributing profit among the stockholder of the organization. ...

Q: On January 1, 2020, Swifty Limited paid $561,003.30 for 10% bonds with a maturity value of $540,000....

A: Journal entries refers to the process of systematic documentation of financial activities of a compa...

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: Oleck Inc. produces stereo components that sell at P = $100 per unit. Oleck’s fixed costs are $200,0...

A: EBIT means earning before interest and tax. We will calculate the rate of return on new investment a...

Q: Vogel Inc. manufactures memory chips for electronic toys within a relevant range of 128,000 to 200,0...

A: A flexible budget is that budget that includes all the flexibility and change in the output. In comp...

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: Problem.No.2(Amalgamation in the nature of merger-pooling of interest method -with statutory reserve...

A: X Ltd. and Y Ltd. merged into XY Ltd.  Calculation of purchase consideration : Particulars X Ltd ...

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: Adjust the Cash BalanceWe obtain the following 2018 forecasts of selected financial statement line i...

A: Cash flow statement: It is one of the financial statements which explains how an organization has ra...