STATEMENT OF CASH FLOWS - 50 POINTS Colson Company operates several stores and i

Question

STATEMENT OF CASH FLOWS - 50 POINTS














Colson Company operates several stores and is a publicly traded   company. The comparative balance sheet and income statement for Colson as of   May 31, 2012, are shown below. The company is preparing its statement of cash   flows. COLSON COMPANY Comparative Balance Sheet As of May 31 2012 2011 Current Assets Cash $     29,870 $     19,780 Accounts receivable         76,750         56,980 Inventory       221,310       250,050 Prepaid expenses           9,120           7,012 Total current assets       337,050       333,822 Plant assets Plants assets       596,980       502,400 Less accumulated depreciation - plant assets       151,250       124,890 Net plant assets       445,730       377,510 Total assets $   782,780 $   711,332 Current Liabilities Accounts payable $   122,680 $   114,950 Salaries and wages payable         45,270         71,300 Interest payable         27,150         26,145 Total current liabilities       195,100       212,395 Long-term debt Bonds payable         71,320       102,200 Total liabilities       266,420       314,595 Stockholders' equity Common stock, $12 par       370,000       280,000 Retained earnings       146,360       116,737 Total stockholders' equity       516,360       396,737 Total liabilities and stockholders' equity $   782,780 $   711,332 COLSON COMPANY Income Statement For the Year Ended May 31, 2012 Sales $ 1,256,870 Cost of goods sold       724,430 Gross profit       532,440 Expenses Salaries and wages   expense       251,150 Interest expense         75,500 Depreciation expense         26,360 Other expenses           8,652 Total expenses       361,662 Operating income       170,778 Income tax expense         42,700 Net income $   128,078 The   following is additional information concerning Colson's transactions during   the year ended May 31, 2012. 1. All sales during the   year were made on account. 2. All merchandise was   purchased on account, compromising the total accounts payable account. 3. Plant assets costing   $94580 were purchase by paying $24680 in cash and issuing 6990 shares of   stock. 4. The "other   expenses" are related to prepaid items. 5. All income taxes   incurred during the year were paid during the year. 6. In order to supplement   its cash, Colson issued 2010 shares of common stock at par value. 7. Cash dividends of   $98455 were declared and paid at the end of the fiscal year. Instructions a) Prepare a statement of cash flows for Colson Company for the   year ended May 31, 2012, using the direct method of presentation. Be sure to   support the statements with the appropriate calculations. (A reconciliation   of net income to net cash is not required). b) Using the indirect method, calculate only the net cash flow   from operating activities for Colson Company for the year ended May 31, 2012. STATEMENT OF CASH FLOWS - 50 POINTS














Colson Company operates several stores and is a publicly traded   company. The comparative balance sheet and income statement for Colson as of   May 31, 2012, are shown below. The company is preparing its statement of cash   flows. COLSON COMPANY Comparative Balance Sheet As of May 31 2012 2011 Current Assets Cash $     29,870 $     19,780 Accounts receivable         76,750         56,980 Inventory       221,310       250,050 Prepaid expenses           9,120           7,012 Total current assets       337,050       333,822 Plant assets Plants assets       596,980       502,400 Less accumulated depreciation - plant assets       151,250       124,890 Net plant assets       445,730       377,510 Total assets $   782,780 $   711,332 Current Liabilities Accounts payable $   122,680 $   114,950 Salaries and wages payable         45,270         71,300 Interest payable         27,150         26,145 Total current liabilities       195,100       212,395 Long-term debt Bonds payable         71,320       102,200 Total liabilities       266,420       314,595 Stockholders' equity Common stock, $12 par       370,000       280,000 Retained earnings       146,360       116,737 Total stockholders' equity       516,360       396,737 Total liabilities and stockholders' equity $   782,780 $   711,332 COLSON COMPANY Income Statement For the Year Ended May 31, 2012 Sales $ 1,256,870 Cost of goods sold       724,430 Gross profit       532,440 Expenses Salaries and wages   expense       251,150 Interest expense         75,500 Depreciation expense         26,360 Other expenses           8,652 Total expenses       361,662 Operating income       170,778 Income tax expense         42,700 Net income $   128,078 The   following is additional information concerning Colson's transactions during   the year ended May 31, 2012. 1. All sales during the   year were made on account. 2. All merchandise was   purchased on account, compromising the total accounts payable account. 3. Plant assets costing   $94580 were purchase by paying $24680 in cash and issuing 6990 shares of   stock. 4. The "other   expenses" are related to prepaid items. 5. All income taxes   incurred during the year were paid during the year. 6. In order to supplement   its cash, Colson issued 2010 shares of common stock at par value. 7. Cash dividends of   $98455 were declared and paid at the end of the fiscal year. Instructions a) Prepare a statement of cash flows for Colson Company for the   year ended May 31, 2012, using the direct method of presentation. Be sure to   support the statements with the appropriate calculations. (A reconciliation   of net income to net cash is not required). b) Using the indirect method, calculate only the net cash flow   from operating activities for Colson Company for the year ended May 31, 2012.

Explanation / Answer

Related Questions

Navigate

• Browse (All)
• Browse S
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.