Requirement 1 Based on the financial statements provided, prepare the Statement
ID: 2597468 • Letter: R
Question
Requirement 1
Based on the financial statements provided, prepare the Statement of Cash Flows for
the year ended December 31, 2013.
Additional Information Needed:
Draper declared and paid $1,400 in dividends to stockholders. The issue price of the bonds was $360,384 and the amortization of the bond discount for the year was $3,432. Net Income for the year was $141,235.
Draper Consulting Inc.
Balance Sheet
December 31, 2013 and 2012
2013
2012
Assets:
Current Assets:
Cash
514,936
16,350
Accounts Receivable
37,500
1,750
Supplies
2,200
200
Total Current Assets
554,636
18,300
Plant Assets:
Equipment
16,000
1,800
Less: Accumulated Depreciation - Equipment
(440)
(30)
Furniture
5,700
4,200
Less: Accumulated Depreciation - Furniture
(661)
(70)
Building
125,000
0
Less: Accumulated Depreciation - Building
(1,652)
0
Total Assets
698,583
24,200
Liabilities:
Current Liabilities:
Accounts Payable
10,000
4,650
Salary Payable
4,100
685
Unearned Service Revenue
0
700
Total Current Liabilities
14,100
6,035
Long-Term Liabilities:
Interest Payable
10,667
0
Notes Payable
40,000
0
Bonds Payable
400,000
0
Less: Discount on Bonds Payable
(36,184)
0
Total Liabilities
428,583
6,035
Stockholders' Equity:
Common Stock
130,000
18,000
Retained Earnings
140,000
165
Total Stockholders' Equity
270,000
18,165
Total Liabilities and Stockholders' Equity
698,583
24,200
Draper Consulting Inc.
Income Statement
Year Ended December 31, 2012
Revenue:
Service Revenue
3,850
Expenses:
Rent Expense
550
Utilities Expense
250
Salary Expense
685
Depreciation Expense - Equipment
30
Depreciation Expense - Furniture
70
Supplies Expense
700
Total Expenses
2,285
Net Income
1,565
Draper Consulting Inc.
Balance Sheet
December 31, 2013 and 2012
2013
2012
Assets:
Current Assets:
Cash
514,936
16,350
Accounts Receivable
37,500
1,750
Supplies
2,200
200
Total Current Assets
554,636
18,300
Plant Assets:
Equipment
16,000
1,800
Less: Accumulated Depreciation - Equipment
(440)
(30)
Furniture
5,700
4,200
Less: Accumulated Depreciation - Furniture
(661)
(70)
Building
125,000
0
Less: Accumulated Depreciation - Building
(1,652)
0
Total Assets
698,583
24,200
Liabilities:
Current Liabilities:
Accounts Payable
10,000
4,650
Salary Payable
4,100
685
Unearned Service Revenue
0
700
Total Current Liabilities
14,100
6,035
Long-Term Liabilities:
Interest Payable
10,667
0
Notes Payable
40,000
0
Bonds Payable
400,000
0
Less: Discount on Bonds Payable
(36,184)
0
Total Liabilities
428,583
6,035
Stockholders' Equity:
Common Stock
130,000
18,000
Retained Earnings
140,000
165
Total Stockholders' Equity
270,000
18,165
Total Liabilities and Stockholders' Equity
698,583
24,200
Draper Consulting, Inc Statement of Cash Flows Year Ended December 31, 2013 Cash Flows from Operating Activities: Adjustments to reconcile Net Income to net cash: Net Cash Provided by Operating Activities Cash Flows from Investing Activities: Net Cash Provided by Investing Activities Cash Flows from Financing Activities: Net Cash Provided by Financing Activities Net Increase in Cash Cash Balance, December 31, 2012 Cash Balance, December 31, 201;3Explanation / Answer
Statement Of cash Flow Net Income 151902 Adjustment to reconcile net income to Net Cash Add Amortization of the bond discount 3432 ADD Depreciation =(440+661+1652)-(30+70) 2653 Less Increase in Account receviable -35750 Less Increase in Supplies -2000 Add Increase in Accounts Payable 5350 Add Increase in Salary Payable 3415 Less Decrease Unearned Service Revenue -700 Net Cash Provided By operating Activities 128302 Cash flow from Investing Activities Purchase of Equipment -14200 Purchase of Furniture -1500 Purchase of Building -125000 -140700 Cash flow from Financing Activities Bond issued 360384 Dividend Paid -1400 Note Issued 40000 Common stock Issued 112000 510984 Net Increase in Cash 498586 Cash Balance ,Dec 31 2012 16350 Cash Balance ,Dec 31 2013 514936
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