Prepare a cash flow statement for 2014 with clear documentation (i.e., show your
ID: 2478625 • Letter: P
Question
Prepare a cash flow statement for 2014 with clear documentation (i.e., show your work) for each section of the statement. Use either the direct or the indirect method.
Additional information
1.There were no write-offs of delinquent accounts during the year.
2.A building was sold during the year for $120.
V. (continued)
Comparative balance sheets and an income statement for 2014 are presented below for Nroklesah Company.
Nroklesah Company
Comparative Balance Sheets and Income Statement
For the Years 2013 and 2014
BALANCE SHEETS
Assets 2014 2013
Cash $ 200 $ 285
Accounts receivable 350 300
Allowance for bad debts (40) (25)
Inventory 100 135
Land 600 500
Buildings 275 255
Accumulated depreciation-buildings (75) (80)
Total assets $1,410 $1,370
Liabilities & Owners’ Equity
Liabilities
Accounts payable $ 300 $ 305
Wages payable 70 60
Dividends payable 30 25
Taxes payable 50 45
Long-term Bonds payable 100 100
Premium on bonds payable 7 10
Total liabilities 557 545
Owners’ Equity
Common stock 650 600
Retained earnings 203 225
Total owners’ equity 853 825
Total liabilities & owners’ equity $1,410 $1,370
INCOME STATEMENT (2008)
Revenue $1,500
Cost of goods sold 850
Gross margin 650
Operating expenses
Wage expense $171
Depreciation expense 40
Bad debt expense 15
Bond interest expense 14
Total operating expenses 240
Net operating income 410
Gain on sale of building 60
Net income before tax 470
Income tax 141
Net income after tax $ 329
BALANCE SHEETS
Assets 2014 2013
Cash $ 200 $ 285
Accounts receivable 350 300
Allowance for bad debts (40) (25)
Inventory 100 135
Land 600 500
Buildings 275 255
Accumulated depreciation-buildings (75) (80)
Total assets $1,410 $1,370
Liabilities & Owners’ Equity
Liabilities
Accounts payable $ 300 $ 305
Wages payable 70 60
Dividends payable 30 25
Taxes payable 50 45
Long-term Bonds payable 100 100
Premium on bonds payable 7 10
Total liabilities 557 545
Owners’ Equity
Common stock 650 600
Retained earnings 203 225
Total owners’ equity 853 825
Total liabilities & owners’ equity $1,410 $1,370
INCOME STATEMENT (2008)
Revenue $1,500
Cost of goods sold 850
Gross margin 650
Operating expenses
Wage expense $171
Depreciation expense 40
Bad debt expense 15
Bond interest expense 14
Total operating expenses 240
Net operating income 410
Gain on sale of building 60
Net income before tax 470
Income tax 141
Net income after tax $ 329
Explanation / Answer
Particulars Amount Amount Cash Flow from operating Activities Net Income 329 Add:- Dep 40 Less:- gain On sale of Building -60 Amotization of bond premium -3 306 increse in Receivable -50 Decrease in inventory 35 Decrease in Payable -5 increse in wages payable 10 Increse In Tax Payable 5 Increase in Bad debt -15 -20 Income tax Paid -236 -25 Accumulated Dep -75 Cash Flow from Investing Activities Sale of Buliding 120 Purchased of land -100 20 Cash Flow from Financing Activities Dividend -30 Issue of Stock -50 -80 cash & Cash Equivalents -85 Beg cash 285 Ending Cash 200