Statement of cash flows —indirect method The comparative balance sheet of Harris Industries Inc. at December 31, 20Y4 and 20Y3, is as follows: Dec. 31, 20Y4 Dec. 31, 20Y3 Assets Cash $443,240 $360,920 Accounts receivable {net 665,280 592,200 Inventories 887,880 1,022,560 Prepaid expenses 31,640 25,200 Land 302,400 302,400 Buildings 1,713,600 1,134,000 Accumulated depreciation—buildings (466,200) (414,540) Machinery and equipment 781,200 781,200 Accumulated depreciation—machinery and equipment (214,200) (191,520) Patents 106,960 112,000 Total assets $4,251,800 $3,724,420 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors|) $837,480 $927,080 Dividends payable 32,760 25,200 Salaries payable 78,960 87,080 Mortgage note payable, due in nine years 224,000 0 Bonds payable 0 390,000 Common stock, $5 par 200,400 50,400 Paid-in capital. Excess of issue price over par—common stock 366,000 126,000 Retained earnings 2,512,200 2,118,660 Total liabilities and stockholders' equity $4,251,800 $3,724,420 An examination of the income statement and the accounting records revealed the following additional information applicable to 20Y4: A. Net income, $524,580. B. Depreciation expense reported on the income statement: buildings, $51,660; machinery and equipment, $22,680. C. Patent amortization reported on the income statement, $5,040. D. A building was constructed for $579,600. E. A mortgage note for $224,000 was issued for cash. F. 30,000 shares of common stock were issued at $ 13 in exchange for the bonds payable. G. Cash dividends declared, $ 131,040. Instructions Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.

BuyFind

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169
BuyFind

Corporate Financial Accounting

15th Edition
Carl Warren + 1 other
Publisher: Cengage Learning
ISBN: 9781337398169

Solutions

Chapter 13, Problem 13.2BPR
Textbook Problem

Statement of cash flows —indirect method

The comparative balance sheet of Harris Industries Inc. at December 31, 20Y4 and 20Y3, is as follows:

  Dec. 31, 20Y4 Dec. 31, 20Y3
Assets  
Cash $443,240 $360,920
Accounts receivable {net 665,280 592,200
Inventories 887,880 1,022,560
Prepaid expenses 31,640 25,200
Land 302,400 302,400
Buildings 1,713,600 1,134,000
Accumulated depreciation—buildings (466,200) (414,540)
Machinery and equipment 781,200 781,200
Accumulated depreciation—machinery and equipment (214,200) (191,520)
Patents 106,960 112,000
Total assets $4,251,800 $3,724,420
Liabilities and Stockholders' Equity  
Accounts payable (merchandise creditors|) $837,480 $927,080
Dividends payable 32,760 25,200
Salaries payable 78,960 87,080
Mortgage note payable, due in nine years 224,000 0
Bonds payable 0 390,000
Common stock, $5 par 200,400 50,400
Paid-in capital. Excess of issue price over par—common stock 366,000 126,000
Retained earnings 2,512,200 2,118,660
Total liabilities and stockholders' equity $4,251,800 $3,724,420

An examination of the income statement and the accounting records revealed the following additional information applicable to 20Y4:

  1. A. Net income, $524,580.
  2. B. Depreciation expense reported on the income statement: buildings, $51,660; machinery and equipment, $22,680.
  3. C. Patent amortization reported on the income statement, $5,040.
  4. D. A building was constructed for $579,600.
  5. E. A mortgage note for $224,000 was issued for cash.
  6. F. 30,000 shares of common stock were issued at $ 13 in exchange for the bonds payable.
  7. G. Cash dividends declared, $ 131,040.

Instructions

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.

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Chapter 13 Solutions

Corporate Financial Accounting
Ch. 13 - Classifying cash flows Identify whether each of...Ch. 13 - Adjustments to net incomeindirect method Ripley...Ch. 13 - Changes in current operating assets and...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Land transactions on the statement of cash flows...Ch. 13 - Common stock transactions on the statement of cash...Ch. 13 - Free cash flow Dillin Inc. reported the following...Ch. 13 - Appendix 2 Cash received from customersdirect...Ch. 13 - Reporting changes in equipment on statement of...Ch. 13 - Cash flows from operating activitiesnet loss...Ch. 13 - Effect of transactions on cash flows Slate the...Ch. 13 - Classifying cash flows Identify the type of cash...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Reporting changes in equipment on statement of...Ch. 13 - Reporting changes in equipment on statement of...Ch. 13 - Reporting land transactions on statement of cash...Ch. 13 - Determining cash payments to stockholders The...Ch. 13 - Reporting stockholders' equity items on statement...Ch. 13 - Reporting land acquisition for cash and mortgage...Ch. 13 - Reporting issuance and retirement of long-term...Ch. 13 - Determining net income from net cash flow from...Ch. 13 - Cash flows from operating activitiesindirect...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method List the...Ch. 13 - Cash flows from operating activitiesdirect method...Ch. 13 - Determining selected amounts for cash flows from...Ch. 13 - Cash flows from operating activities direct method...Ch. 13 - Cash flows from operating activitiesdirect method...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flowsdirect method The...Ch. 13 - Statement of cash flows direct method applied to...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flows indirect method The...Ch. 13 - Statement of cash flowsindirect method The...Ch. 13 - Statement of cash flows direct method The...Ch. 13 - Statement of cash flowsdirect method applied to PR...Ch. 13 - Free Cash Flow Analyze and compare Amazon.com,...Ch. 13 - Analyze and compare Apple, Coca-Cola, and Verizon...Ch. 13 - Analyze Aeropostale Aeropostale, Inc. (AROPQ) is a...Ch. 13 - Analyze and compare ATT and Facebook ATT Inc. (T)...Ch. 13 - Analyze Priceline The Priceline Group Inc. (PCLN)...Ch. 13 - Ethics in Action Head Donuts Inc. is a retailer of...Ch. 13 - Communication Tidewater Inc., a retailer, provided...Ch. 13 - Using the statement of cash flows You are...

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