The comparative balance sheet of Everlast Flooring Co. for June 30, 2003 and 200
ID: 2446076 • Letter: T
Question
The comparative balance sheet of Everlast Flooring Co. for June 30, 2003 and 2002, is as follows: June 30, 2003 June 30, 2002 Assets Cash.............................................................................................. $124,200 $67,900 Accounts receivable (net)............................................................... 102,400 97,600 Inventories..................................................................................... 142,700 123,500 Investments.................................................................................... 0 58,000 Land.............................................................................................. 124,000 0 Equipment...................................................................................... 373,400 201,400 Accumulated depreciation............................................................... (79,400) (58,900) -------- --------- $787,300 $489,500 Liabilities & Stakeholders' Equity Accounts payable (merchandise creditors)....................................... $93,200 $84,600 Accrued expenses (operating expenses).......................................... 13,000 12,300 Dividends payable.......................................................................... 15,000 12,500 Common stock, $10 par................................................................. 120,000 80,000 Paid-in capital in excess of par - common stock.............................. 310,000 130,000 Retained earnings........................................................................... 236,100 170,100--------- --------- $787,300 $489,500 The following additional information was taken from the records of Everlast Flooring Co.: a. Equipment and land were acquired for cash. b. There were no disposals of equipment during the year. c. The investments were sold for $50,000 cash. d. The common stock was issued for cash. e. There was a $126,000 credit to Retained Earnings for net income. f. There was a $60,000 debit to Retained Earnings for cash dividends declared. INSTRUCTIONS: Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. The comparative balance sheet of Everlast Flooring Co. for June 30, 2003 and 2002, is as follows: June 30, 2003 June 30, 2002 Assets Cash.............................................................................................. $124,200 $67,900 Accounts receivable (net)............................................................... 102,400 97,600 Inventories..................................................................................... 142,700 123,500 Investments.................................................................................... 0 58,000 Land.............................................................................................. 124,000 0 Equipment...................................................................................... 373,400 201,400 Accumulated depreciation............................................................... (79,400) (58,900) -------- --------- $787,300 $489,500 Liabilities & Stakeholders' Equity Accounts payable (merchandise creditors)....................................... $93,200 $84,600 Accrued expenses (operating expenses).......................................... 13,000 12,300 Dividends payable.......................................................................... 15,000 12,500 Common stock, $10 par................................................................. 120,000 80,000 Paid-in capital in excess of par - common stock.............................. 310,000 130,000 Retained earnings........................................................................... 236,100 170,100
--------- --------- $787,300 $489,500 The following additional information was taken from the records of Everlast Flooring Co.: a. Equipment and land were acquired for cash. b. There were no disposals of equipment during the year. c. The investments were sold for $50,000 cash. d. The common stock was issued for cash. e. There was a $126,000 credit to Retained Earnings for net income. f. There was a $60,000 debit to Retained Earnings for cash dividends declared. INSTRUCTIONS: Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.
Explanation / Answer
Cash Flow Statement for2003
$
Cash Flow Statement for2003
I. Cash flows from OperationActivities :$
Net profit before tax and extraordinaryitems 126000 Add: loss on sale of investment 8000 Depreciationexpense 20500 Operating profit before Working Capitalcharges 154,500 Add: Increase in A/P 8,600 Increase in dividendpayable 2,500 Increase in accruedexpense 700 11,800 Less:Increase in Inventory 19,200 Increase in Accountsreceivable 4,800 (24,000) A. cashinflows from operating activities 142,300 II. Cash flows fromInvesting Activities: Sale of Investment 50,000 Purchase of land (124,000) Purchase Property, plant &equipment (172,000) B.Cashused in Investing Activities (246000) III. Cash flows fromFinancing Activities: Issuance of common stock 40,000 paid-in capital 180,000 Dividend paid (60,000) C. Cashflows from financing Activities 160,000 Net increase in cash and cashequivalents(A+B+C) 56300 Add: Cash and cash equivalent in thebeginning 67,900 Cash andcash equivalents at the end 31 dec.2007 124200