Problem 17-7A Presented below are the financial statements of Nosker Company. NO
ID: 2460727 • Letter: P
Question
Problem 17-7A Presented below are the financial statements of Nosker Company. NOSKER COMPANY Comparative Balance Sheets December 31 Assets 2014 2013 Cash $35,000 $19,340 Accounts receivable 32,410 18,310 Inventory 26,580 20,160 Equipment 59,890 77,820 Accumulated depreciation—equipment (29,170 ) (23,880 ) Total $124,710 $111,750 Liabilities and Stockholders’ Equity Accounts payable $28,830 $ 16,570 Income taxes payable 7,300 8,150 Bonds payable 26,060 33,860 Common stock 17,120 13,710 Retained earnings 45,400 39,460 Total $124,710 $111,750 NOSKER COMPANY Income Statement For the Year Ended December 31, 2014 Sales revenue $241,950 Cost of goods sold 176,510 Gross profit 65,440 Operating expenses 23,390 Income from operations 42,050 Interest expense 3,730 Income before income taxes 38,320 Income tax expense 7,480 Net income $30,840 Additional data: 1. Dividends declared and paid were $24,900. 2. During the year equipment was sold for $7,880 cash. This equipment cost $17,930 originally and had a book value of $7,880 at the time of sale. 3. All depreciation expense, $15,340, is in the operating expenses. 4. All sales and purchases are on account. Partially correct answer. Your answer is partially correct. Try again. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) NOSKER COMPANY Statement of Cash Flows For the Year Ended December 31, 2014.
Statement of Cash Flows
For the Year Ended December 31, 2014
Adjustments to reconcile net income to
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cashres_EAT_1358401055953_0_7832684781375184_006
Increase in Income Taxes Payable Sale of Equipment Issuance of Bonds Redemption of Bonds Redemption of Common Stock To Suppliers For Operating Expenses Payment of Dividends For Interest Increase in Inventory Increase in Accounts Receivable Issuance of Common Stock Decrease in Inventory Purchase of Equipment Decrease in Income Taxes Payable Decrease in Accounts Receivable For Income Taxes Net Income Decrease in Accounts Payable Depreciation Expense Increase in Accounts Payable res_EAT_1358401055953_0_7832684781375184_016
$
Adjustments to reconcile net income to
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cashres_EAT_1358401055953_0_7832684781375184_047
Increase in Accounts Receivable Increase in Inventory Issuance of Common Stock Decrease in Accounts Receivable Issuance of Bonds Net Income Decrease in Inventory Payment of Dividends Depreciation Expense To Suppliers For Income Taxes Sale of Equipment Increase in Accounts Payable For Operating Expenses Purchase of Equipment Redemption of Bonds Redemption of Common Stock For Interest Decrease in Accounts Payable Decrease in Income Taxes Payable Increase in Income Taxes Payable res_EAT_1358401055953_0_7832684781375184_055
$
Redemption of Bonds Redemption of Common Stock Net Income Payment of Dividends Depreciation Expense For Operating Expenses Increase in Accounts Payable For Income Taxes Decrease in Accounts Payable Decrease in Income Taxes Payable To Suppliers Increase in Income Taxes Payable Issuance of Common Stock Increase in Inventory Sale of Equipment Increase in Accounts Receivable Purchase of Equipment Decrease in Inventory Decrease in Accounts Receivable For Interest Issuance of Bonds res_EAT_1358401055953_0_7832684781375184_087
Decrease in Inventory Purchase of Equipment Increase in Accounts Payable Decrease in Income Taxes Payable Decrease in Accounts Payable Redemption of Common Stock Increase in Inventory Sale of Equipment Increase in Income Taxes Payable Net Income Issuance of Bonds For Income Taxes Payment of Dividends Increase in Accounts Receivable For Operating Expenses Decrease in Accounts Receivable Redemption of Bonds Issuance of Common Stock To Suppliers For Interest Depreciation Expense res_EAT_1358401055953_0_7832684781375184_108
Increase in Accounts Receivable Redemption of Common Stock Increase in Accounts Payable Increase in Income Taxes Payable Net Income Decrease in Accounts Receivable To Suppliers Sale of Equipment Payment of Dividends Redemption of Bonds For Operating Expenses Increase in Inventory For Income Taxes Decrease in Inventory For Interest Issuance of Bonds Depreciation Expense Issuance of Common Stock Decrease in Accounts Payable Decrease in Income Taxes Payable Purchase of Equipment res_EAT_1358401055953_0_7832684781375184_131
Decrease in Inventory Increase in Inventory Redemption of Common Stock For Interest For Income Taxes Payment of Dividends To Suppliers Increase in Accounts Receivable For Operating Expenses Purchase of Equipment Net Income Issuance of Common Stock Depreciation Expense Decrease in Accounts Receivable Redemption of Bonds Decrease in Income Taxes Payable Increase in Accounts Payable Issuance of Bonds Decrease in Accounts Payable Increase in Income Taxes Payable Sale of Equipment res_EAT_1358401055953_0_7832684781375184_152
Cash at Beginning of Period Cash at End of Period Cash Flows from Financing Activities Cash Flows from Investing Activities Cash Flows from Operating Activities Net Cash Provided by Financing Activities Net Cash Provided by Investing Activities Net Cash Provided by Operating Activities Net Cash used by Financing Activities Net Cash used by Investing Activities Net Cash used by Operating Activities Net Decrease in Cash Net Increase in Cash res_EAT_1358401055953_0_7832684781375184_183
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cashres_EAT_1358401055953_0_7832684781375184_195
To Suppliers Sale of Equipment Increase in Income Taxes Payable Purchase of Equipment Redemption of Common Stock Redemption of Bonds Net Income For Interest Increase in Accounts Payable Issuance of Bonds Issuance of Common Stock Payment of Dividends Increase in Inventory Decrease in Inventory Decrease in Accounts Payable For Income Taxes Decrease in Accounts Receivable Depreciation Expense Decrease in Income Taxes Payable Increase in Accounts Receivable For Operating Expenses res_EAT_1358401055953_0_7832684781375184_217
Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cashres_EAT_1358401055953_0_7832684781375184_232
Explanation / Answer
workings
Statement of Cash Flows Cash flows from operating activities Net income 30840 Adjustments to reconcile net incometo net cash provided by operatingactivities Depreciation expense 15340 Increase in accounts payable 12260 Decrease in income taxes payable -850 Increase in merchandise inventory -6420 Increase in accounts receivable -14100 6230 Net cash provided by operatingactivities 37070 Cash flows from investing activities Sale of equipment 7880 Cash flows from financing activities Issuance of common stock 17120-13710 3410 Redemption of bonds =33860-26060 -7800 Payment of dividends -24900 Net cash used by financing activities -29290 Net increase in cash 15660 Cash at beginning of period 19340 Cash at end of period 35000