Joyner Company’s income statement for Year 2 follows: Sales $ 705,000 Cost of go
ID: 2485095 • Letter: J
Question
Joyner Company’s income statement for Year 2 follows:
Sales
$
705,000
Cost of goods sold
207,000
Gross margin
498,000
Selling and administrative expenses
217,000
Net operating income
281,000
Gain on sale of equipment
9,000
Income before taxes
290,000
Income taxes
116,000
Net income
$
174,000
Its balance sheet amounts at the end of Years 1 and 2 are as follows:
Year 2
Year 1
Assets
Cash
$
124,400
$
104,000
Accounts receivable
265,000
113,000
Inventory
318,000
282,000
Prepaid expenses
10,500
21,000
Total current assets
717,900
520,000
Property, plant, and equipment
626,000
504,000
Less accumulated depreciation
165,100
131,800
Net property, plant, and equipment
460,900
372,200
Loan to Hymans Company
48,000
0
Total assets
$
1,226,800
$
892,200
Liabilities and Stockholders' Equity
Accounts payable
$
314,000
$
263,000
Accrued liabilities
44,000
55,000
Income taxes payable
85,700
81,200
Total current liabilities
443,700
399,200
Bonds payable
201,000
108,000
Total liabilities
644,700
507,200
Common stock
344,000
289,000
Retained earnings
238,100
96,000
Total stockholders' equity
582,100
385,000
Total liabilities and stockholders' equity
$
1,226,800
$
892,200
Equipment that had cost $30,700 and on which there was accumulated depreciation of $10,700 was sold during Year 2 for $29,000. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock. What's the statement of cash flows?
Joyner Company’s income statement for Year 2 follows:
Explanation / Answer
Statement of cash flow Cash flow from operations Net income $ 174,000 Depreciation Expenses $ 44,000 Change in Prepaid expenses $ 10,500 Change in accounts receivable $ -152,000 Change in inventory $ -36,000 Change in accounts payable $ 51,000 Change in accrued Expenses $ -11,000 Changes in income taxes payable $ 4,500 Total Cash flow from operations $ 85,000 Cash flow from Investing Proceeds from sales of Asset $ 30,700 Changes in gross fixed assets $ -122,000 Loan to Hymans Company $ -48,000 Total Cash flow from investing $ -139,300 Cash flow from financing Change in long term debt $ 93,000 Change in common stock $ 55,000 Cash Dividends $ -73,300 Total Cash flow from financing $ 74,700 Total cash flow $ 20,400 Beginning cash flow $ 104,000 Ending cash flow $ 124,400 Cost of equipment $ 30,700 Less Accumulated depreciation $ 10,700 Book value of equipment $ 20,000 Sale of equipment $ 29,000 Gain on sale of equipment $ 9,000
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