The income statement, balance sheets, and additional information for Great Adven
ID: 2652646 • Letter: T
Question
The income statement, balance sheets, and additional information for Great Adventures, Inc., are provided below.
GREAT ADVENTURES, INC.
Income Statement
For the year ended December 31, 2014
Revenues:
Service revenue (clinic, racing, TEAM) $ 568,000
Sales revenue (MU watches) 124,000
Total revenues $ 692,000
Expenses:
Cost of goods sold (watches) 69,400
Operating expenses 289,276
Depreciation expense 48,900
Interest expense 29,556
Income tax expense 56,500
Total expenses 493,632
Net income $ 198,368
GREAT ADVENTURES, INC.
Balance Sheet
December 31, 2014 and 2013
2014 2013 Increase (I)
or
Decrease (D)
Assets
Current assets:
Cash $ 394,496 $ 150,400 $ 244,096 (I)
Accounts receivable 43,900 33,300 10,600 (I)
Inventory 16,800 12,300 4,500 (I)
Other current assets 12,200 10,000 2,200 (I)
Long-term assets:
Land 480,000 0 480,000 (I)
Buildings 1,000,000 0 1,000,000 (I)
Equipment 63,300 63,300
Accumulated depreciation (74,850) (25,950) 48,900 (I)
Total assets $ 1,935,846 $ 243,350
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 13,700 $ 10,400 $ 3,300 (I)
Interest payable 850 850
Income tax payable 57,900 39,400 18,500 (I)
Long-term liabilities:
Notes payable 503,528 31,900 471,628 (I)
Stockholders' Equity:
Common stock 116,000 19,000 97,000 (I)
Paid-in capital 1,072,900 0 1,072,900 (I)
Retained earnings 227,968 141,800 86,168 (I)
Treasury stock (57,000) 0 (57,000) (I)
Total liabilities and stockholders’ equity $ 1,935,846 $ 243,350
Additional Information for 2014:
1.
Borrowed $510,000 in January 2014. Made 12 monthly payments during the year, reducing the balance of the loan by $38,372.
2. Issued common stock for $1.164 million.
3. Purchased 9,700 shares of treasury stock for $15 per share.
4. Reissued 5,900 shares of treasury stock at $16 per share.
5. Declared and paid a cash dividend of $112,200.
Required:
Prepare the statement of cash flows for the year ended December 31, 2014, using the indirect method.(Amounts to be deducted should be indicated with minus sign. Omit the "$" sign in your response.)
GREAT ADVENTURES, INC.
Statement of Cash Flows
For the year ended December 31, 2012
Cash Flows from Operating Activities
(Click to select)
Net loss
Net income
$
Adjustments for noncash effects:
(Click to select)
Increase in accounts payable
Purchase of buildings
Payment of dividends
Increase in other current assets
Increase in inventory
Depreciation expense
Purchase of land
Increase in accounts receivable
Changes in current assets and current liabilities:
(Click to select)
Decrease in accounts payable
Depreciation expense
Decrease in inventory
Increase in accounts receivable
Increase in income tax payable
Increase in inventory
Increase in other current assets
Increase in accounts payable
(Click to select)
Decrease in inventory
Increase in accounts receivable
Decrease in accounts payable
Increase in accounts payable
Depreciation expense
Increase in other current assets
Increase in inventory
Increase in income tax payable
(Click to select)
Decrease in inventory
Depreciation expense
Increase in income tax payable
Increase in other current assets
Increase in inventory
Increase in accounts receivable
Decrease in accounts payable
Increase in accounts payable
(Click to select)
Decrease in inventory
Increase in accounts receivable
Increase in income tax payable
Increase in accounts payable
Increase in inventory
Depreciation expense
Increase in other current assets
Decrease in accounts payable
(Click to select)
Decrease in accounts payable
Increase in accounts payable
Increase in inventory
Increase in accounts receivable
Increase in income tax payable
Increase in other current assets
Decrease in inventory
Depreciation expense
Net cash flows from operating activities $
Cash Flows from Investing Activities
(Click to select)
Purchase of buildings
Decrease in accounts payable
Increase in inventory
Purchase of furniture
Cash
Increase in accounts payable
Decrease in inventory
Purchase of land
(Click to select)
Purchase of furniture
Purchase of buildings
Purchase of land
Decrease in accounts payable
Cash
Decrease in inventory
Increase in accounts payable
Increase in inventory
Net cash flows from investing activities
Cash Flows from Financing Activities
(Click to select)
Payment of dividends
Decrease in accounts payable
Repayment of notes payable
Purchased treasury stock
Issued common stock
Reissued treasury stock
Increase in accounts payable
Issued note payable
(Click to select)
Decrease in accounts payable
Purchased treasury stock
Increase in accounts payable
Repayment of notes payable
Issued common stock
Issued note payable
Reissued treasury stock
Payment of dividends
(Click to select)
Increase in accounts payable
Issued note payable
Repayment of notes payable
Decrease in accounts payable
Payment of dividends
Purchased treasury stock
Issued common stock
Reissued treasury stock
(Click to select)
Repayment of notes payable
Issued common stock
Purchased treasury stock
Reissued treasury stock
Decrease in accounts payable
Issued note payable
Payment of dividends
Increase in accounts payable
(Click to select)
Decrease in accounts payable
Purchased treasury stock
Issued common stock
Reissued treasury stock
Repayment of notes payable
Payment of dividends
Issued note payable
Increase in accounts payable
(Click to select)
Decrease in accounts payable
Repayment of notes payable
Payment of dividends
Issued common stock
Increase in accounts payable
Reissued treasury stock
Purchased treasury stock
Issued note payable
Net cash flows from financing activities
(Click to select)
Net decrease in cash
Net increase in cash
Cash at the beginning of the period
Cash at the end of the period $
References
Explanation / Answer
GREAT ADVENTURES, INC.
Statement of Cash Flows
For the year ended December 31, 2012
Cash Flows from Operating Activities:
Net Income
$198,368
Adjustments for non-cash effects:
Depreciation Expense
$48,900
Income Tax Expense
$56,500
Increase in account receivables
($10,600)
Increase in inventory
($4,500)
Increase in current assets
($2,200)
Increase in accounts payable
$3,300
Income tax paid
($38,000)
Net cash flows from Operating Activities
$251,768
Cash Flows from Investing Activities
Cash paid for acquiring land
($480,000)
Cash paid for acquiring building
($1,000,000)
Net cash flows from Investing Activities
($1,480,000)
Cash Flows from financing Activities
Cash received from issuing note payable
$510,000
Payment of loan
($38,372)
Cash received from issuance common stock
$1,164,000
Cash paid for purchasing of treasury stock
($145,500)
Cash receipts from re-issuing of treasury stock
$94,400
Cash paid for dividends
($112,200)
Net cash flows from financing Activities
$1,472,328
Net increase (decrease) in cash
$244,096
Cash at beginning of the period
$150,400
Cash at the end of the period
$394,496
GREAT ADVENTURES, INC.
Statement of Cash Flows
For the year ended December 31, 2012
Cash Flows from Operating Activities:
Net Income
$198,368
Adjustments for non-cash effects:
Depreciation Expense
$48,900
Income Tax Expense
$56,500
Increase in account receivables
($10,600)
Increase in inventory
($4,500)
Increase in current assets
($2,200)
Increase in accounts payable
$3,300
Income tax paid
($38,000)
Net cash flows from Operating Activities
$251,768
Cash Flows from Investing Activities
Cash paid for acquiring land
($480,000)
Cash paid for acquiring building
($1,000,000)
Net cash flows from Investing Activities
($1,480,000)
Cash Flows from financing Activities
Cash received from issuing note payable
$510,000
Payment of loan
($38,372)
Cash received from issuance common stock
$1,164,000
Cash paid for purchasing of treasury stock
($145,500)
Cash receipts from re-issuing of treasury stock
$94,400
Cash paid for dividends
($112,200)
Net cash flows from financing Activities
$1,472,328
Net increase (decrease) in cash
$244,096
Cash at beginning of the period
$150,400
Cash at the end of the period
$394,496
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