Problem 13-6A (Indirect Method) Financial statements for E-Perform, Inc. follow:
ID: 2567768 • Letter: P
Question
Problem 13-6A (Indirect Method) Financial statements for E-Perform, Inc. follow: E-PERFORM, INC Statement of Financial Position December 31 Assets Cash Trading investments Accounts receivable Inventories Prepaid expenses Property, plant, and equipment Accumulated depreciation 2012 2011 $97,300 128,110 74,610 121,000 18,150 268,780 49,870 658,080 $47,560 115,540 44,02O 92,210 26,680 242,960 (52,020 516.950 Total assets Liabilities and Shareholders' Equity Accounts payable Accrued liabilities Bank loan payable Common shares Retained earnings $78,830 6,510 152,100 173,740 247,580 105,770 516,950 $93,860 12,170 103,390 201,080 Total liabilities and shareholders' equity E-PERFORM, INC. Income Statement Year Ended December 31, 2012 Sales Cost of goods sold Gross profit Operating expenses Profit from operations Other revenues and expenses $491,120 184,000 307,120 115,820 191,300 Unrealized gain on trading investments $12,570 8,380 199,680 45,730 (4.19o) Interest expense Profit before income tax Income tax expense Profit 1. 2. 3. Prepaid expenses and accrued liabilities relate to operating expenses. An unrealized gain on trading investments of $12,570 was recorded New equipment costing $84,070 was purchased for $24,500 cash and a $59,570 long-term bank loan payable. Old equipment having an orginal cost of $58,250 was sold for $1,340 5. Accounts payable relate to merchandise creditors. 6. Same of the bank lcan was repaid during the year 7. A dividend was paid during the year 8. Operating expenses include $45,390 of depreciation expense and a $9,370 loss on disposal of equipment. Prepare the watement of cash fiows, using the indirect methed. (Show amounts that decrease cash flow with elther a -sign e.g. -15,000 or in parenthesis e.g (1S, 000). Adjustments to reconcile profit toExplanation / Answer
E Perform INC. Cash flow Statements for the year ended Dec 31,2012 Cash Flow from Operating Activities Net Profits 153950 Income Tax Expense 45730 A Depreciation Account Unrealized Gain on Investments -12570 To Sold Asset 47540 By Balance B/d 52020 Interest Expense 4190 By Depreciation 45390 Depreciation Expense 45390 To Balance c/d 49870 Original Cost 58250 Loss on Disposal of Asset 9370 Total 97410 Total 97410 Loss on Disposal 9370 Cash Flow before WC Changes 246060 Sales Value 1340 Total Value of Sold Asset 10710 Add: Increase in CL Accumlated Deprecition on Sold 47540 Accounts Payable 15030 Accured Liabilities 5660 Fixed Asset Account To Balance B/d 242960 By Sales 58250 Add: Decreae in CA To Purchases 84070 Prepaid Expenses 8530 By Balance C/d 268780 Less: Decrease in CL Total 327030 Total 327030 Less: Increase in CA Trading Investment Account Account Recievables -30590 To Balance B/d 115540 Inventories -28790 To Unrealised Gain 12570 By Balance C/d 128110 Cash Flow After WC Changes 215900 Total 128110 Total 128110 Less: Income Tax Expense -45730 Cash Flow from Operating Activities 170170 Retained Earning Account Cash Flow from Investing Activities To Dividend Paid 12140 By Balance B/d 105770 Purchase of Equipment -24500 (BF) By Profit During the Period 153950 Sales of Equipment 1340 To Balance c/d 247580 Total 259720 Total 259720 Cash Flow from Investing Activities -23160 Bank Loan Account To Loan Paid 108280 By Balance B/d 152100 Cash Flow from Financing Activities (BF) By Asset 59570 Issue of Stock 27340 To Balance c/d 103390 Dividend Paid -12140 Total 211670 Total 211670 Loan Repaid -108280 Interest Paid -4190 Cash Flow from Financing Activities -97270 Net Cash Flow 49740 Opening Cash 47560 Closing Cash 97300 (Agreeing with Cash Closing Balance)