The following information is available for the Ehrens Corporation: Ehrens Corpor
ID: 2451136 • Letter: T
Question
The following information is available for the Ehrens Corporation:
Ehrens Corporation
Balance Sheets
At December 31
2014
2013
Assets:
Cash............................................................................
$ 27,040
$ 25,440
Accounts receivable.....................................................
29,400
32,180
Merchandise inventory................................................
70,625
59,710
Long-term investments...............................................
56,000
56,000
Equipment...................................................................
175,500
145,500
Accumulated depreciation............................................
(33,550
)
(31,200
)
Total assets....................................................................
$325,015
$287,630
Liabilities:
Accounts payable.........................................................
$ 62,745
$ 42,635
Salaries payable............................................................
10,200
10,725
Long Term Bonds payable...........................................
48,750
66,000
Total liabilities...............................................................
$121,695
$119,360
Equity:
Common stock............................................................
117,000
96,000
Paid-in capital in excess of par....................................
13,000
9,000
Retained earnings.........................................................
73,320
63,270
Total equity....................................................................
$203,320
$168,270
Total liabilities and equity...............................................
$325,015
$287,630
Ehrens Corporation
Income Statement
For Year Ended December 31, 2014
Sales.............................................................
$240,000
Cost of goods sold.........................................
$80,900
Depreciation expense...................................
29,400
Other operating expenses.............................
48,000
Interest expense...........................................
2,000
(160,300
)
Other gains (losses):
Loss on sale of equipment..........................
(8,400
)
Income before taxes.....................................
71,300
Income taxes expense...................................
27,650
Net income...................................................
$ 43,650
Additional information:
(1) Received cash for the sale of equipment that had cost $37,550 yielding an $8,400 loss.
(2) New equipment was purchased for $67,550 cash.
(3) Cash dividends were paid.
(4) Additional shares of stock were issued for cash.
Prepare a statement of cash flows.
1. The total adjustment to reconcile net income to net cash provided by operating activities related to Accounts Receivable is?.
2. The total adjustment to reconcile net income to net cash provided by operating activities related to Merchandise Inventory is?
3. The total adjustment to reconcile net income to net cash provided by operating activities related to Accounts Payable is?
4. The total adjustment to reconcile net income to net cash provided by operating activities related to Salary Payable is?
5. The total adjustment to reconcile net income to net cash provided by operating items not providing or using cash (non-cash revenues or expenses) is?
6. The total adjustment to reconcile net income to net cash provided by operating activities related to non-operating items (gains and losses) is?
Ehrens Corporation
Balance Sheets
At December 31
2014
2013
Assets:
Cash............................................................................
$ 27,040
$ 25,440
Accounts receivable.....................................................
29,400
32,180
Merchandise inventory................................................
70,625
59,710
Long-term investments...............................................
56,000
56,000
Equipment...................................................................
175,500
145,500
Accumulated depreciation............................................
(33,550
)
(31,200
)
Total assets....................................................................
$325,015
$287,630
Liabilities:
Accounts payable.........................................................
$ 62,745
$ 42,635
Salaries payable............................................................
10,200
10,725
Long Term Bonds payable...........................................
48,750
66,000
Total liabilities...............................................................
$121,695
$119,360
Equity:
Common stock............................................................
117,000
96,000
Paid-in capital in excess of par....................................
13,000
9,000
Retained earnings.........................................................
73,320
63,270
Total equity....................................................................
$203,320
$168,270
Total liabilities and equity...............................................
$325,015
$287,630
Explanation / Answer
1. The total adjustment to reconcile net income to net cash provided by operating activities related to Accounts Receivable is?.
Total adjustment to reconcile net income to Accounts Receivable is = Beginning Accounts receivable - Ending Accounts receivable
Total adjustment to reconcile net income to Accounts Receivable is = 32180-29400
Total adjustment to reconcile net income to Accounts Receivable is = $ 2780
2. The total adjustment to reconcile net income to net cash provided by operating activities related to Merchandise Inventory is?
Total adjustment to reconcile net income to Merchandise Inventory is = Beginning Merchandise Inventory - Ending Merchandise Inventory
Total adjustment to reconcile net income to Merchandise Inventory is = 59710 - 70625
Total adjustment to reconcile net income to Merchandise Inventory is = - $ 10,915
3. The total adjustment to reconcile net income to net cash provided by operating activities related to Accounts Payable is?
Total adjustment to reconcile net income to Accounts Payable is = Ending Accounts Payable - Beginning Accounts Payable
Total adjustment to reconcile net income to Accounts Payable is = 62745-42635
Total adjustment to reconcile net income to Accounts Payable is = $ 20110
4. The total adjustment to reconcile net income to net cash provided by operating activities related to Salary Payable is?
Total adjustment to reconcile net income to Salary Payable is = Ending Salary Payable - Beginning Salary Payable
Total adjustment to reconcile net income to Salary Payable is = 10200-10725
Total adjustment to reconcile net income to Salary Payable is = - $ 525
5. The total adjustment to reconcile net income to net cash provided by operating items not providing or using cash (non-cash revenues or expenses) is?
Total adjustment to reconcile net income using cash (non-cash revenues or expenses) = Depreciation expense
Total adjustment to reconcile net income using cash (non-cash revenues or expenses) = 29400
6. The total adjustment to reconcile net income to net cash provided by operating activities related to non-operating items (gains and losses) is?
Total adjustment to reconcile net income related to non-operating items (gains and losses) = Loss on sale of equipment
Total adjustment to reconcile net income related to non-operating items (gains and losses) = 8400
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