INTERMEDIATE ACCT.-MYLAB COMBO ACCESS
3rd Edition
ISBN: 9780137391707
Author: GORDON
Publisher: PEARSON
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Textbook Question
Chapter 22, Problem 22.5P
Statement of Cash Flows, Indirect Method, Complex Accounts, Disclosures. The Khan Group provided its balance sheet and income statement as of December 31 of the current year.
The Khan Group Balance Sheets At December 31 |
|||
Assets | Current Year | Prior Year | |
Current Assets | |||
Cash | $ 15,000 | $ 12,000 | |
Trading Debt Investments | 36,000 | 30,000 | |
Accounts Receivable - net | 65,000 | 35,000 | |
Merchandise Inventory | 105,000 | 115,000 | |
Total Current Assets | $ 221,000 | $ 192,000 | |
Noncurrent Assets | |||
Investments in Affiliate Companies | $ 161,500 | $ 100,500 | |
Property. Plant, and Equipment - net | 1,533,050 | 1,128,580 | |
Intangible Assets - net | 95,200 | 88,000 | |
Total Noncurrent Assets | $1,789,750 | $ 1,317,080 | |
Total Assets | $2,010,750 | $1,509,080 | |
Liabilities |
Current Liabilities | ||
Current Portion of Long-Term Debt | $ 6,000 | $ 4,500 |
Accounts Payable | 87,500 | 92,500 |
Dividends Payable | 5,000 | 0 |
Income Taxes Payable | 28,500 | 30,000 |
Total Current Liabilities | $ 127,000 | $ 127,000 |
Noncurrent Liabilities | ||
Bonds Payable | $ 425,000 | $ 425,000 |
Less: Discount on Bonds | (87,500) | (100,250) |
Notes Payable | 52,500 | 10,000 |
3,750 | 1,250 | |
Net Obligations under Pension Plans | 45,000 | 22,630 |
Total Noncurrent Liabilities | $ 438,750 | $ 358,630 |
Total Liabilities | $ 565,750 | $ 485,630 |
Shareholders' Equity | ||
Common Stock. $1 par value | $ 60,000 | $ 50,000 |
Additional Paid-in Capital in Excess of Par - Common | 132,100 | 122,100 |
Additional Paid-in Capital - Stock Options | 2,900 | 0 |
1,175,000 | 781,850 | |
Accumulated Other Comprehensive Income | 75,000 | 69,500 |
Total Shareholders' Equity | $1,445,000 | $1,023,450 |
Total Liabilities and Shareholders' Equity | $2,010,750 | $1,509,080 |
The Khan Group Income Statement For the Current Year Ended December 31 |
|
Sales | $2,212,040 |
Cost of Goods Sold | 1,327,224 |
Gross Profit | $ 884,816 |
Selling. General, and Administrative Expenses | $ 43,000 |
Unrealized Losses on Trading Portfolio | $ 3,600 |
Pension Expense | 210,500 |
Bad Debt Expense | 1,500 |
17,700 | |
Amortization Expense | 6,750 |
Total Operating Expenses | $ 283,050 |
Operating Income | $ 601,766 |
Interest Expense | $ (50,100) |
Investment Income (includes gain on sale) | 50,000 |
Equity Earnings from Affiliate Companies | 118,500 |
Income before Tax | $ 720,166 |
Income Tax Expense | (288,066) |
Net Income | $ 432,100 |
Additional information
- The company classifies its current investments as trading securities. During the current year it sold trading securities that had been acquired for $34,500. Treat the trading securities as an investing activity.
- The company reported accounts receivable net of the allowance for
bad debts . - The company acquired equipment during the year and made no disposals Paid cash.
- The company did not acquire nor dispose of intangible assets during the year.
- The company included a $40,500 gain on the sale of trading investments in investment income on the income statement.
- The change in accumulated other comprehensive income is the result of pension adjustments.
- There were no additional investments in affiliate companies during the year.
- There were no debt issuances during the year.
Required
Prepare the company's cash flow statement for the current year under the indirect method. Provide all required disclosures.
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Check out a sample textbook solutionChapter 22 Solutions
INTERMEDIATE ACCT.-MYLAB COMBO ACCESS
Ch. 22 - Prob. 22.1QCh. 22 - Prob. 22.2QCh. 22 - Prob. 22.3QCh. 22 - Prob. 22.4QCh. 22 - Prob. 22.5QCh. 22 - How do firms reclassify gains and losses on the...Ch. 22 - Prob. 22.7QCh. 22 - Prob. 22.8QCh. 22 - Prob. 22.9QCh. 22 - Prob. 22.10Q
Ch. 22 - Prob. 22.11QCh. 22 - What approach is used in preparing the operating...Ch. 22 - Under the indirect method, do firms subtract bond...Ch. 22 - Do firms subtract pension expense from net income...Ch. 22 - Prob. 22.15QCh. 22 - Prob. 22.16QCh. 22 - Prob. 22.1MCCh. 22 - Prob. 22.2MCCh. 22 - Big Dollars Corporation's comparative financial...Ch. 22 - Prob. 22.4MCCh. 22 - Prob. 22.5MCCh. 22 - Sykes Corporation's comparative balance sheets at...Ch. 22 - Prob. 22.7MCCh. 22 - Prob. 22.8MCCh. 22 - Prob. 22.1BECh. 22 - Prob. 22.2BECh. 22 - Prob. 22.3BECh. 22 - Prob. 22.4BECh. 22 - Prob. 22.5BECh. 22 - Prob. 22.6BECh. 22 - Prob. 22.7BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.9BECh. 22 - Prob. 22.10BECh. 22 - Prob. 22.11BECh. 22 - Prob. 22.12BECh. 22 - Prob. 22.13BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.15BECh. 22 - Prob. 22.16BECh. 22 - Prob. 22.17BECh. 22 - Prob. 22.18BECh. 22 - Prob. 22.19BECh. 22 - Prob. 22.20BECh. 22 - Prob. 22.21BECh. 22 - Prob. 22.22BECh. 22 - Complex Transactions, Acquisitions and...Ch. 22 - Prob. 22.24BECh. 22 - Prob. 22.25BECh. 22 - Complex Transactions, Change in Accounts...Ch. 22 - Prob. 22.27BECh. 22 - Prob. 22.28BECh. 22 - Prob. 22.1ECh. 22 - Prob. 22.2ECh. 22 - Prob. 22.3ECh. 22 - Prob. 22.4ECh. 22 - Prob. 22.5ECh. 22 - Prob. 22.6ECh. 22 - Prob. 22.7ECh. 22 - Prob. 22.8ECh. 22 - Prob. 22.9ECh. 22 - Prob. 22.10ECh. 22 - Statement of Cash Flows, Indirect Method....Ch. 22 - Prob. 22.12ECh. 22 - Prob. 22.13ECh. 22 - Prob. 22.14ECh. 22 - Prob. 22.15ECh. 22 - Prob. 22.16ECh. 22 - Prepare Statement of Cash Flows, Direct Method....Ch. 22 - Prob. 22.2PCh. 22 - Prob. 22.3PCh. 22 - Prob. 22.4PCh. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Prob. 22.11PCh. 22 - Prob. 22.12PCh. 22 - Prob. 22.13PCh. 22 - Statement of Cash Flows, Direct Method, Complex...Ch. 22 - Prob. 1JCCh. 22 - Prob. 1FSCCh. 22 - Prob. 1SSCCh. 22 - Surfing the Standards Case 2: Cash Flow per Share...Ch. 22 - Basis for Conclusions Cases Basis for Conclusions...Ch. 22 - Basis for Conclusions Case 2: Indirect versus...
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- Statement of Cash Flows The following are Mueller Companys cash flow activities: a. Net income, 68,000 b. Increase in accounts receivable, 4,400 c. Receipt from sale of common stock, 12,300 d. Depreciation expense, 11,300 e. Dividends paid, 24,500 f. Payment for purchase of building, 65,000 g. Bond discount amortization, 2,700 h. Receipt from sale of long-term investments at cost, 10,600 i. Payment for purchase of equipment, 8,000 j. Receipt from sale of preferred stock, 20,000 k. Increase in income taxes payable, 3,500 l. Payment for purchase of land, 9,700 m. Decrease in accounts payable, 2,900 n. Increase in inventories, 10,300 o. Beginning cash balance, 18,000 Required: Prepare Mueller Company's statement of cash flows.arrow_forwardTifton Co. had the following cash transactions during the current year: Refer to the information in RE21-6. Prepare the financing activities section of Tifton Co.s statement of cash flows.arrow_forwardTifton Co. had the following cash transactions during the current year: Prepare the investing activities section of Tiftons statement of cash flows.arrow_forward
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