The 2014 comparative balance sheet and 2014 income statement of Byfield 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. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the following financial information grouped according to your surname initial. Having identified the information you are next required to address the requirements outline below. Financial info to be used by surnames with initials (C, O, R, Y) Simple Things Industries Ltd. Comparative Balance Sheet December 31, 2014 and 2013 2014 2013 Increase/(Decrease) Assets Cash 110,000 70,000 ? Accounts Receivable 300,000 325,000 ? Supplies 350,000 280,000 ? Prepaid expenses 35,000 28,000 ? Intangible assets 215,000 215,000 ? Equipment, net 1,200,000 980,000 ? Total Assets 2,210,000 1,898,000 Liabilities Accounts payable 250,000 140,000 ? Accrued liabilities 210,000 215,000 ? Income tax payable 78,000 98,500 ? Long-term notes payable 602,000 725,000 ? Stockholders' Equity Common Stock 410,000 330,000 ? Retained earnings 730,000 450,000 ? Treasury stock (70,000) (60,500) ? Total liabilities and stockholders' equity 2,210,000 1,898,000 Income Statement Year Ended December 31,2014 Revenues and gains: Sales revenue 2,100,000 Gain on sale of Equipment 85,000 Total revenues and gains 2,185,000 Expenses Cost of goods sold 900,000 Depreciation expense 150,000 Other operating expense 350,000 Total expenses 1,400,000 Income before income taxes 785,000 Income tax expense 210,000 Net Income 575,000 Notes Acquisition of Equipment during 2014 540,000 Sale proceed from sale of Equipment 255,000 Receipt for issuance of notes payable 27,000 Payment for note payable 150,000 Dividend paid 295,000 Book value of equipment sold 170,000 Requirements Reconstruct the company’s comparative balance sheet for 2013/2014 using the information in line with your surname initial 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 using the information in line with your surname initial.
The 2014 comparative balance sheet and 2014 income statement of Byfield 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.
The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the following financial information grouped according to your surname initial.
Having identified the information you are next required to address the requirements outline below.
Financial info to be used by surnames with initials (C, O, R, Y)
|
Simple Things Industries Ltd. |
|||
|
Comparative Balance Sheet |
|||
|
December 31, 2014 and 2013 |
|||
|
|
2014 |
2013 |
Increase/(Decrease) |
|
Assets |
|
|
|
|
Cash |
110,000 |
70,000 |
? |
|
Accounts Receivable |
300,000 |
325,000 |
? |
|
Supplies |
350,000 |
280,000 |
? |
|
Prepaid expenses |
35,000 |
28,000 |
? |
|
Intangible assets |
215,000 |
215,000 |
? |
|
Equipment, net |
1,200,000 |
980,000 |
? |
|
Total Assets |
2,210,000 |
1,898,000 |
|
|
Liabilities |
|
|
|
|
Accounts payable |
250,000 |
140,000 |
? |
|
Accrued liabilities |
210,000 |
215,000 |
? |
|
Income tax payable |
78,000 |
98,500 |
? |
|
Long-term notes payable |
602,000 |
725,000 |
? |
|
Stockholders' Equity |
|
|
|
|
Common Stock |
410,000 |
330,000 |
? |
|
|
730,000 |
450,000 |
? |
|
|
(70,000) |
(60,500) |
? |
|
Total liabilities and stockholders' equity |
2,210,000 |
1,898,000 |
|
|
|
Income Statement |
|||||
|
|
Year Ended December 31,2014 |
|||||
|
|
Revenues and gains: |
|
|
|||
|
|
Sales revenue |
2,100,000 |
|
|||
|
|
Gain on sale of Equipment |
85,000 |
|
|||
|
|
Total revenues and gains |
|
2,185,000 |
|||
|
|
Expenses |
|
|
|||
|
|
Cost of goods sold |
900,000 |
|
|||
|
|
|
150,000 |
|
|||
|
|
Other operating expense |
350,000 |
|
|||
|
|
Total expenses |
|
1,400,000 |
|||
|
|
Income before income taxes |
|
785,000 |
|||
|
|
Income tax expense |
|
210,000 |
|||
|
|
Net Income |
|
575,000 |
|||
|
Notes |
|
|||||
|
Acquisition of Equipment during 2014 |
540,000 |
|
||||
|
Sale proceed from sale of Equipment |
255,000 |
|
||||
|
Receipt for issuance of notes payable |
27,000 |
|
||||
|
Payment for note payable |
150,000 |
|
||||
|
Dividend paid |
295,000 |
|
||||
|
Book value of equipment sold |
170,000 |
|
||||
Requirements
- Reconstruct the company’s comparative balance sheet for 2013/2014 using the information in line with your surname initial 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 using the information in line with your surname initial.
Step by step
Solved in 3 steps with 3 images
