GLENWOOD COMPANY Financial Data for December 31, 2014 and 2015 2014 2015 Cash Ac

ID: 2467536 • Letter: G

Question

GLENWOOD COMPANY Financial Data for December 31, 2014 and 2015 2014 2015 Cash Accounts Receivable $ 23,925 43,050 $39,825 $ 34,125 3,600 $ 146,475 $ 156,000 135,825 S 47,550 61,950 Prepaid Expenses 1,650 $ 146,700 Equipment Accumulated Depr-Equipment Total Assets 311,025 310,650 5,100 Income Taxes Payable $ 4,425 S Accounts Payable Dividends Payable $33,750 4,500 S Mortgage Bonds Payable Common Stock at $10 par 37.500 $ 168,750 168,750 Retained Earnings $ 62,100 $ 108,000 $ 311,025 310,650 Total Liabilities and Equity $446,800 700 222,300 $ 100,000 $ 20,300 $25,500 3,300 -Sales Discounts Cost of Goods Sold Selling Expenses G&A; Expenses Depreciation Expenses Loss on sale of equipment Income before taxes Loss on retirement of mortgage bonds Income tax expenses $ 73,875 825 $13,725 a. Equipment costing $21,375 with accumulated depreciation of $11,100 is sold for cash. b. Equipment purchases are for cash All sales are made on credit, all inventory on credit. epare the Operating Activities Section of the Statement of Cash Flows for December 31,2015 ing the Indirect Method. Extra credit for preparation of other sections of the statement.

Explanation / Answer

Cash Flow Statement of GLENWOOD Company from Operating Activities -Indirect Method

For Year Ending 31, December, 2015

Net Profit as per Profit and loss account (Before Taxes)

73875

Adjustments for non-operating and non-cash expenses

Add:-Depreciation Expenses

25500

Add:-Loss on sale retirement of mortgage bonds

825

Add: Loss on sale of Equipment

3300

Operating Profit before working capital changes

103500

Add:- Decrease in Accounts Receivable

5700

Less: Increase in prepaid Expenses

(1950)

Less: Increase in Inventory

(9300)

Add: Increase in Income tax payable

675

Less: Decrease in Accounts Payable

(4950)

Cash Generated from Operations

Less: Income Tax paid (Less refund if any)

(13725)

Add/Less: Extraordinary Items

Nil

=Net Cash from/used in Operating activities (A)

79950