This Question: 3 pts 6 of 35 (2 complete) Kentucky Company uses the indirect met

Question

This Question: 3 pts 6 of 35 (2 complete) Kentucky Company uses the indirect method to prepare the statement of cash flows. Refer to the following income statement: Kentucky Company Income Statement Year Ended December 31, 2019 $247,000 2,600 5,100 Sales Revenue Interest Revenue Gain on Sale of Plant Assets Total Revenues and Gains Cost of Goods Sold Salary Expense Depreciation Expense Other Operating Expenses 254,700 119,000 42.000 15,000 20.000 O A. $11,700 B. $39,500 O C. $44,600 O D. $29,600

Explanation / Answer

$ 1 Sales revenue           247,000 Less; Cost of goods sold         (119,000) Salary expenses           (42,000) Other operating expenses           (20,000) Cash flow from operating activity             66,000 2 Accrued interest from November 1 till December 31 = ( 337,000 x 12% x 2/12 )                                                                                                 = $ 6,740 3 Sales revenue           153,000 Less; Cost of goods sold         (140,000) Salary expenses           (18,000) Cash flow from operating activity              (5,000) 4 Number of shares issued = 14,000 shares Issue price   = $ 23 per share Cash is debited for = 14,000 shares x $ 23 = $ 322,000 $ 5 Note Payable as on December 31,2018             23,000 Less: To be repaied within a year ( current liability)              (5,750) Long term liability             17,250 $ 5,750 shown as current liability and $ 17,250 shown as long term liability.

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