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Statement of Cash Flows, Direct Method, Complex Accounts, Disclosures. Using the information provided in P22-13, prepare the cash flow statement and all required disclosures for American Safety Products using the direct method.
American Safety Products, Inc.
Balance Sheets
At December 31
Assets | Current Year | Prior Year | |||
Current Assets | |||||
Cash | $ 1,379,568 | $ 378,122 | |||
Trading Debt Investments | 424,778 | 600,548 | |||
Accounts Receivable - net | 695,756 | 302,806 | |||
Merchandise Inventory | 988,706 | 695,756 | |||
Prepaid Expenses | 647,500 | 385,000 | |||
Total Current Assets | $ 4,136,308 | $ 2,362,232 | |||
Noncurrent Assets | |||||
Investments in Affiliate Companies | $ 1,940,794 | $ 736,037 | |||
Held-to-Maturity Debt Investments | 542,500 | 351,750 | |||
Property, Plant, and Equipment – net | 9,993,257 | 11,208,999 | |||
Equipment under Finance Lease - net | 2,800,000 | 2,975.000 | |||
Intangible Assets - net | 640,828 | 915.469 | |||
195,300 | 143.500 | ||||
Total Noncurrent Assets | $ 16,112,679 | $16,330,755 | |||
Total Assets | $20,248,987 | $18,692,987 | |||
Liabilities Current Liabilities |
|||||
Current Portion of Long-Term Debt | $ 183,096 | $ 481,903 | |||
Accounts Payable | 1,369,541 | 1,058,102 | |||
Dividends Payable | 549,281 | 402,806 | |||
Income Taxes Payable | 481,903 | 428,439 | |||
Total Current Liabilities | $ 2,583,821 | $ 2,371,250 | |||
Noncurrent Liabilities | |||||
Bonds Payable | $ 2,929,500 | $ 2,929,500 | |||
Add: Premium on Bonds | 941,102 | 1,061,944 | |||
Notes Payable | 1,651,506 | 1,647,844 | |||
Obligations under Finance Leases | 3,500,875 | 3,850,000 | |||
457,734 | 530,972 | ||||
Net Obligations under Pension Plans | 585,900 | 439,425 | |||
Total Noncurrent Liabilities | $10,066,617 | $10,459,685 | |||
Total Liabilities | $12,650,438 | $12,830,935 | |||
Shareholders' Equity | |||||
Common Stock, $1 par value | $ 1,338,706 | $ 988.706 | |||
Additional Paid-in Capital in | 3,274,298 | 2,574.298 | |||
Excess of Par - Common Additional Paid-in Capital - Stock Options |
120,842 | 0 | |||
6,416,769 | 4,185,448 | ||||
Accumulated Other Comprehensive Income (AOCI) | (954,285) | 582,238 | |||
Total Shareholders' Equity | $10,196,330 | $ 8,330,690 | |||
Less: |
(2,597,781) | (2,468,638) | |||
Total Liabilities and Shareholders' Equity | $20,248,987 | $18,692,987 |
American Safety Products, Inc.
Income Statement
For the Current Year Ended December 31
Sales | $9,458,700 |
Cost of Goods Sold | 5,460,300 |
Gross Profit | $3,998,400 |
Selling, General, and Administrative Expenses | $360,763 |
Pension Expense | 1,085.814 |
15,380 | |
138,338 | |
Amortization Expense - finance leases | 175,000 |
Amortization Expense - intangible assets | 48,825 |
Total Operating Expenses | $ 1.824.120 |
Operating Income | $2.174,280 |
Loss on Disposal of Equipment | $ (189,875) |
Interest Expense | (407.472) |
Interest Revenue | 789.250 |
Realized Loss on Trading Securities | (65.500) |
Equity Earnings from Affiliate Companies | 1,792,149 |
Income before Tax | $ 4,092,832 |
Income Tax Expense | (1,493,853) |
Net Income | $2,598,979 |
Additional Information:
- American Safety Products sold trading securities at a loss.
- The company sold one of its franchises at cost.
- The company sold plant assets with a carrying value of $1.077.404 for a loss of $189,875.
- The company made debt payments to reduce the current portion of long-term debt and finance lease obligations American Safety Products borrowed an additional $3,662 by issuing a long-term note.
- The change in AOCI is the result of adjustments required for the company’s defined-benefit pension plan.
- American Safety Products acquired additional securities classified as held to maturity It did not purchase any other investments during the year.
- It did not reissue any treasury stock.
- Treat the trading securities as an investing activity.
- Ignore the amortization of the held-to-maturity investment.
- Assume no adjustments to fair value for trading investments.
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