Hartman, Inc. has prepared the following comparative balance sheet for 2014 and
ID: 2483826 • Letter: H
Question
Hartman, Inc. has prepared the following comparative balance sheet for 2014 and 2015:
2015 2014
Cash $292,000 $153,000
Account receivable 149,000 117,000
Inventory 150,000 180,000
Prepaid expense 18,000 27,000
Plant asset 1,275,000 1,050,000
Accumulated depreciation (450,000) (375,000)
Patent 153,000 174,000
Total 1,587,000 1,326,000
Accounts payable 153,000 168,000
Accured liabilities 60,000 42,0000
Mortgage payable -- 450,000
Preferred stock 525,000 ----
Additional pais-in capital- preferred 120,000 -----
Common stock 600,000 600,000
Retained earnings 129,000 66,000
Total 1,587,000 1,326,000
1. Accumulated depreciation account has been credited only for the depreciation expense for the period.
2. The retained earnings account has been charged for dividends of $148,000 and credited for rhe net income for the year.
The income statement for 2015 is as follows:-
Sales revenue 1,980,000
Cost of sales 1,089,000
Gross profit 891,000
Opearting expense 680,000
Net income 211,000
Required:- prepare a statement of cash flow(indirect method) for Hartmen, Inc. for the year ended December 31, 2015.
Explanation / Answer
Cash Flow statement by Indirect method is prepared as under:
Hartmen Inc. Statement of Cash Flows For the year ended December 31, 2015 Particulars Amount ($) Amount ($) Net Income 2,11,000 Add: Depreciation 75,000 75,000 Increase in Accounts Receivable -32,000 Decrease in inventory 30,000 Decrease in prepaid expense 9,000 Decrease in Accounts Payable -15,000 Increase in accrued liabilities 18,000 Net Cash flows from Operating Activities 2,96,000 Cash flows from Investing Activities: Purchase of plant asset -2,25,000 Sale of patent 21,000 Net Cash flows used in investing activities -2,04,000 Cash flows from Financing Activities: Mortgage paid -4,50,000 Preferred stock issued 6,45,000 Dividends Paid -1,48,000 Net Cash flows used in financing activities 47,000 Net increase in Cash balance 1,39,000 Cash as of January 1,2015 1,53,000 Cash as of December 31, 2015 2,92,000Related Questions
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