The income statement and additional data of Daily Plus, Inc. follows: Data table Daily Plus, Inc. Income Statement Year Ended September 30, 2024 Net Sales Revenue $230,000 Cost of Goods Sold 91,000 Gross Profit 139,000 Operating Expenses: Salaries Expense $52,000 Depreciation Expense—Plant Assets 25,000 Total Operating Expenses 77,000 Net Income Before Income Taxes 62,000 Income Tax Expense 13,020 Net Income $48,980 Prepare Daily Plus's statement of cash flows for the year ended September 30, 2024, using the indirect method. Include a separate section for non-cash investing and financing activities. More info a. Acquisition of plant assets is $114,000. Of this amount, $104,000 is paid in cash and $10,000 by signing a note payable. b. Cash receipt from sale of land totals $27,000. There was no gain or loss. c. Cash receipts from issuance of common stock total $31,000. d. Payment of note payable is $9,000. e. Payment of dividends is $13,000. f. From the balance sheet: September 30 2024 2023 Cash $30,000 $18,020 Accounts Receivable 49,000 58,000 Merchandise Inventory 92,000 85,000 Land 71,000 98,000 Plant Assets 199,000 85,000 Accumulated Depreciation (49,000) (24,000) Accounts Payable 34,000 25,000 Accrued Liabilities 10,000 15,000 Notes Payable (long-term) 10,000 9,000 Common Stock, no par 43,000 12,000 Retained Earnings 295,000 259,020 Complete the statement one section at a time, beginning with the cash flows from operating activities. (Use a minus sign or parentheses for amounts that result in a decrease in cash. If a box is not used in the statement, leave the box empty; do not select a label or enter a zero.) Daily Plus, Inc. Statement of Cash Flows Year Ended September 30, 2024 Cash Flows from Operating Activities: Net Income Adjustments to Reconcile Net Income to Net Cash Provided by (Used for) Operating Activities: Net Cash Provided by (Used for) Operating Activities
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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Daily Plus, Inc.
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Income Statement
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Year Ended September 30, 2024
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Net Sales Revenue
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$230,000
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Cost of Goods Sold
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91,000
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Gross Profit
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139,000
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Operating Expenses:
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Salaries Expense
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$52,000
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25,000
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Total Operating Expenses
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77,000
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Net Income Before Income Taxes
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62,000
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Income Tax Expense
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13,020
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Net Income
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$48,980
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a.
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Acquisition of plant assets is
$114,000.
Of this amount,
$104,000
is paid in cash and
$10,000
by signing a note payable. |
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b.
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Cash receipt from sale of land totals
$27,000.
There was no gain or loss. |
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c.
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Cash receipts from issuance of common stock total
$31,000.
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d.
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Payment of note payable is
$9,000.
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e.
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Payment of dividends is
$13,000.
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f.
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From the balance sheet:
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September 30
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2024
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2023
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Cash
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$30,000
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$18,020
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Accounts Receivable
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49,000
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58,000
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Merchandise Inventory
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92,000
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85,000
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Land
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71,000
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98,000
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Plant Assets
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199,000
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85,000
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(49,000)
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(24,000)
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Accounts Payable
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34,000
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25,000
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Accrued Liabilities
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10,000
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15,000
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Notes Payable (long-term)
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10,000
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9,000
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Common Stock, no par
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43,000
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12,000
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295,000
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259,020
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Daily Plus, Inc.
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Statement of Cash Flows
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Year Ended September 30, 2024
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Cash Flows from Operating Activities:
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Net Income
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Adjustments to Reconcile Net Income to Net Cash
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Provided by (Used for) Operating Activities:
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Net Cash Provided by (Used for) Operating Activities
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