Concept explainers
Statement of
Description | |
Cash received on common stock issue | $ 5,700 |
Cash payments for dividends | (4,500) |
Cash payment for acquisition of property, plant, and equipment | (19,400) |
Cash receipt from the sale of investment securities | 12,300 |
Cash payments for repayment of notes | (11,630) |
P6-13 Statement of Cash Flows, Operating Activities Section. Direct Method. Easthoff, Incorporated provided the following balance sheets and income statement for the current year Prepare the operating activities section of the cash flow statement using the direct method. Accrued expenses relate to Selling, General, and Administrative Expenses.
Easthoff, Incorporated
Balance Sheet
At December 31
Assets | Ending | Beginning |
Current Assets | ||
Cash | $ 7000 | $ 3.500 |
Accounts Receivable | 8,500 | 8,000 |
Merchandise Inventory | 2,300 | 1,000 |
Prepaid Expenses | 1,700 | 2,200 |
Total Current Assets | $19,500 | $ 17,700 |
Noncurrent Assets | ||
Investments | $ 12,000 | $24.300 |
Property, Plant, and Equipment – net | 75,000 | 58,000 |
Total Noncurrent Assets | $ 87,000 | $82,300 |
Total Assets | $106,500 | $100,000 |
Liabilities | ||
Current Liabilities | ||
Accounts Payable | $ 4,500 | $1,000 |
Accrued Expenses | 9,800 | 5,120 |
income Taxes Payable | 6.000 | 4.850 |
Total Current Liabilities | $ 20,300 | $ 10,970 |
Noncurrent Liabilities | ||
Notes Payable | $31,000 | $ 42,630 |
Total Noncurrent Liabilities | 31,000 | 42,630 |
Total Liabilities | $51,300 | $ 53.600 |
Common Stock, $1 par value | $ 10,000 | $ 9,000 |
Additional Paid- in Capital | 24,700 | 20,000 |
Retained Earnings | 20,500 | 17400 |
Total Stockholders' Equity | $ 55,700 | $ 46.400 |
Total Liabilities and Stockholders' Equity | $106,500 | $100,000 |
Easthoff, Incorporated
Income Statement
For the year ended December 31
Sales | $80,085 |
Cost of Goods Sold | 48,051 |
Gross Profit | 32,034 |
Selling, General, and Administrative Expenses | 10,700 |
Depreciation Expense | 2,400 |
Total Operating Expenses | 13,100 |
Income Before Interest and Taxes | 18,934 |
Interest Expense | (4,000) |
Income Before Tax | 14,934 |
Income Tax Expense | (7334) |
Net Income | $ 7600 |
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