Concept explainers
Statement of Cash Flows, Indirect Method, Complex Account, Disclosures. Using the information provided in P22.9, prepare the cash flow statement for Orlando incorporated using the direct method. Provide all required disclosures.
Orlando Incorporated Balance Sheets At December 31 |
||
Assets | Current Year | Prior Year |
Current Assets | ||
Cash | $ 60,750 | $ 69,700 |
Available for-Sale Debt Investments | 78,300 | 110,700 |
Accounts Receivable - net | 128,250 | 74,250 |
Merchandise Inventory | 182,250 | 128,250 |
Total Current Assets | $ 449,550 | $ 382,900 |
Noncurrent Assets | ||
Investments m Affiliate Companies | $ 357,750 | $ 135,675 |
Property, Plant, and Equipment - net | 1,842,075 | 2,066,175 |
Intangible Assets - net | 118,125 | 168,750 |
Total Noncurrent Assets | $2,317,950 | $2,370,600 |
Total Assets | $ 2,767,500 | $2,753,500 |
Liabilities | ||
Current Liabilities | ||
Current Portion of Long-Term Debt | $ 33,750 | $ 88,830 |
Accounts Payable | 252,450 | 213,475 |
Dividends Payable | 101,250 | 74,250 |
Income Taxes Payable | 88,830 | 78,975 |
Total Current Liabilities | $ 476,280 | $ 455,530 |
Noncurrent Liabilities |
Bonds Payable | $ 540,000 | $ 540,000 |
Less: Discount on Bonds | (173,475) | (195,750) |
Notes Payable | 304,425 | 303,750 |
84,375 | 97,875 | |
Net Obligations under Pension Plans | 108,000 | 81,000 |
Total Noncurrent Liabilities | $ 863,325 | $ 826,875 |
Total Liabilities | $1,339,605 | $1,282,405 |
Orlando Incorporated Balance Sheets At December 31 |
||
Current Year | Prior Year | |
Shareholders' Equity | ||
Common Stock, $1 par value | $ 182,250 | $ 182,250 |
Additional Paid-in Capital in Excess of Par - Common | 474,525 | 474,525 |
Additional Paid-in Capital - Stock Options | 22,275 | 0 |
924,750 | 706,995 | |
Accumulated Other Comprehensive Income | (175,905) | 107,325 |
Total Shareholders' Equity | $ 1,427,895 | $1,471,095 |
Total Liabilities and Shareholders' Equity | S 2,767,500 | $2,753,500 |
Orlando Incorporated Income Statement For the Current Year Ended December 31 |
|
Sales | $2,342,000 |
Cost of Goods Sold | 1,405,200 |
Gross Profit | $ 936,800 |
Selling, General, and Administrative Expenses | $ 66,500 |
Pension Expense | 200,150 |
Bad Debt Expense | 2,835 |
25,500 | |
Amortization Expense | 9,000 |
Total Operating Expenses | $ 303,985 |
Operating Income | $ 632,815 |
Loss on Disposal of Equipment | $ (35,000) |
Interest Expense | (75,110) |
Investment Income (includes loss on sale) | 5,000 |
Equity Earnings from Affiliate Companies | 330,350 |
Income from Continuing Operations before Tax | $ 858,055 |
Income Tax Expense | (343,222) |
Income from Continuing Operations | $ 514,833 |
Loss from Discontinued Operations - net of tax | (16,478) |
Net Income | $ 498,355 |
Additional Information
- Orlando sold available-for-sale investments that had been acquired for the cost of $74, 250 at a loss of $14, 250 It included this loss in investment income on the income statement
- It acquired additional shares as investments to be carried at fair value Orlando accounted for all investments except for investments carried under the equity method as available-for-sale securities It recorded a $6, 000 unrealized loss for the current year
- It reported accounts receivable net of the allowance for
bad debts - It did not acquire additional plant and equipment during the year but sold a piece of equipment that had cost $198, 600
- It did not increase its percentage ownership of its equity investee (affiliate company)
- It sold one of its franchises at book value
- It signed a $675 promissory note.
- It reported the loss from discontinued operations net of tax and as a cash transaction.
Required
Prepare the current-year cash flow statement for Orlando Incorporated under the indirect method. Present required disclosures.
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