Condensed financial data of Arma Inc. follow. ARMA INC. Comparative Balance Shee
ID: 2348581 • Letter: C
Question
Condensed financial data of Arma Inc. follow.ARMA INC.
Comparative Balance Sheets
December 31
Assets
2012
2011
Cash $ 90,800 $ 48,400
Accounts receivable 92,800 33,000
Inventories 112,500 102,850
Prepaid expenses 28,400 26,000
Investments 138,000 114,000
Plant assets 270,000 242,500
Accumulated depreciation
(50,000)
(52,000)
Total
$682,500
$514,750
Liabilities and Stockholders' Equity
Accounts payable $112,000 $ 67,300
Accrued expenses payable 16,500 17,000
Bonds payable 110,000 150,000
Common stock 220,000 175,000
Retained earnings
224,000
105,450
Total
$682,500
$514,750
ARMA INC.
Income Statement
For the Year Ended December 31, 2012
Sales $392,780
Less:
Cost of goods sold $135,460
Operating expenses, excluding depreciation 12,410
Depreciation expense 46,500
Income taxes 27,280
Interest expense 4,730
Loss on sale of plant assets
7,500
233,880
Net income
$158,900
Additional information:
New plant assets costing $85,000 were purchased for cash during the year.
Old plant assets having an original cost of $57,500 were sold for $1,500 cash.
Bonds matured and were paid off at face value for cash.
A cash dividend of $40,350 was declared and paid during the year.
Explanation / Answer
INDIRECT METHOD FOR CASH FLOWS CASH FLOW FROM OPERATING ACTIVITIES: Net Income + Depreciation, Amortization or Depletion + Non-operating Losses - Non-operating Gains + any increases in Current Liabilities + any decreases in Current Assets - any decreases in Current Liabilities - any increases in Current Assets = Cash Flow from Operating Activities CASH FLOW FROM INVESTING ACTIVITIES: + sell Long-term assets - buy (construct) Long-term assets = Cash Flow from Investing Activities CASH FLOW FROM FINANCING ACTIVITIES: + Stock issued for cash + Cash borrowed with loans and bonds - Treasury stock repurchased for cash - Cash used to repay loans and bonds - Cash dividends paid =Cash Flow from Financing Activities Total Cash Flow (Operating, Investing, Financing) + Beginning Cash = Ending Cash
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.