The following information relates to Henrich’s Hat Store Inc. for the year ended
ID: 2579418 • Letter: T
Question
The following information relates to Henrich’s Hat Store Inc. for the year ended December 31, 20X8.
Henrich’s Hat Store Inc. Balance Sheet, December 31, 20X8
Assets 200X8 20X7
current assets
cash 280000 300000
Accounts receivable 750000 690000
inventory 660000 320000
total current assets 1,690,000 1,310,000
Land 300,000 0
building and fixtures 700,000 550,000
less: accumulated depreciation 100,000 80,000
Total assets $2,590,000 1,780,000
Liabilities
current liabilities
Account Payable 460,000 430,000
Taxes Payable 200,000 170,000
total current liabilities 660,000 600,000
stock holder equity
common stock 200,000 150,000
capital excess of par 1,220,000 750,000
retained earnings 510,000 280,000
total stock holder equity 1,930,000 1,180,000
total liabilities and
stock holder equity $2,590,000 1,780,000
Henrich’s Hat Store Inc. Income Statement for the Year Ended December 31, 20X8
sales revenue $6,000,000
cost of good sold (4,600,000)
gross profit 1,400,000
depreciation expense (20,000)
other expenses (840,000)
earning before tax $40,000
yax expense (140,000)
net income $400,000
Other information: a. The company purchased a building and fixtures with cash during the year, but none were sold. b. Dividends of $170,000 were declared and paid. c. Cash proceeds from the sale of common stock totaled $520,000. d. Land was purchased for $300,000 cash. Prepare the statement of cash flows for Henrich’s Hat Store Inc. for the year ended December 31, 20X8 using the indirect method. do only operating section
Explanation / Answer
Statement of cash flow : Indirect method :
Cash flow from operating activites Net income 400000 Adjustment to reconcile net income Depreciation 20000 Increase account receivable (60000) Increase inventory (340000) Increase account payable 30000 Increase taxes payable 30000 Net Cash flow from operating activities 80000 Cash flow from investing activiites Purchase building (150000) Purchase land (300000) Net Cash flow from investing activities (450000) Cash flow from financing activities Issue common stock 520000 Dividend paid (170000) Net cash flow from financing activities 350000 Net cash flow (20000) Beginning cash 300000 Ending cash 280000Related Questions
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