The balance sheet and income statement for a company are provided below, along w
ID: 2357391 • Letter: T
Question
The balance sheet and income statement for a company are provided below, along with selected additional financial information. Current Year Prior Year Balance Sheet Cash 79,250 73,840 Accounts Receivable 18,820 24,185 Merchandise Inventory 15,354 6,976 Property and equipment 285,735 175,000 Accumulated Depreciation (89,000) (72,630) Total Assets 310,159 207,371 Accounts Payable 8,500 18,200 Wages Payable 3,208 2,194 Notes payable, long-term 72,840 86,100 Contributed capital 84,255 65,980 Retained earnings 141,356 34,897 Total Liabilities and StockholdersExplanation / Answer
Statement of cash flows (indirect method)
Cash flows from operating activities
Net income
122,683
adjustments to net income
depreciation
16,370
Decrease in AR
5,365
Increase in inventory
-8,378
Decrease in AP
-9,700
Increase in wages payable
1,014
net cash provided by operating activities
127,354
Cash flows from investing activities
Purchase of Plant assets
-110,735
net cash provided by investing activities
-110,735
Cash flows from financing activities
paid on long-term loan
-13,260
issued new shares of stock
18,275
dividends
-16,224
net cash provided by financing activities
-11,209
net increase in cash
5,410
Cash balance, beginning
73,840
cash balance, ending
79,250
Statement of cash flows (indirect method)
Cash flows from operating activities
Net income
122,683
adjustments to net income
depreciation
16,370
Decrease in AR
5,365
Increase in inventory
-8,378
Decrease in AP
-9,700
Increase in wages payable
1,014
net cash provided by operating activities
127,354
Cash flows from investing activities
Purchase of Plant assets
-110,735
net cash provided by investing activities
-110,735
Cash flows from financing activities
paid on long-term loan
-13,260
issued new shares of stock
18,275
dividends
-16,224
net cash provided by financing activities
-11,209
net increase in cash
5,410
Cash balance, beginning
73,840
cash balance, ending
79,250
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