Statement of Cash Flow Presented below are the consolidated financial statements
ID: 2716895 • Letter: S
Question
Statement of Cash Flow
Presented below are the consolidated financial statements of The Mann Corporation as of year-end 2012 and 2013.
THE MANN CORPORATION
Consolidated Balance Sheets
As of Year-End ($ thousands)
2013
2012
Assets
Current assets
Cash
$400,000
$250,000
Accounts receivable (net)
990,000
760,000
Inventory
710,000
400,000
Prepaid expenses
100,000
100,000
Total current assets
2,200,000
1,510,000
Investments in affiliate companies
100,000
-
Property and equipment
1,310,000
800,000
Less: Accumulated depreciation
(110,000)
(80,000)
Property & equipment (net)
1,200,000
720,000
Total assets
$3,500,000
$2,230,000
Liabilities & Shareholders’ Equity
Current liabilities
Accounts payable
$570,000
$500,000
Accrued expenses payable
200,000
220,000
Dividends payable
70,000
-
Total current liabilities
840,000
720,000
Note payable—due in ten years
500,000
-
Total liabilities
1,340,000
720,000
Shareholders’ equity
Common stock, $5 par value
300,000
200,000
Additional paid-in-capital
1,200,000
1,160,000
Retained earnings
660,000
150,000
Total shareholders’ equity
2,160,000
1,510,000
Total liabilities & shareholders’ equity
$3,500,000
$2,230,000
THE MANN CORPORATION
Consolidated Income Statement
For Year Ended ($ thousands)
2013
2012
Sales
$16,800,0000
$12,000,000
Cost of goods sold
14,000,000
10,400,000
Gross margin
2,800,000
1,600,000
Selling & administrative expenses
1,930,000
1,048,000
Depreciation expense
30,000
20,000
Income tax expense
240,000
152,000
Net income
$600,000
$380,000
Required
Using the above financial data, prepare the statement of cash flow for 2013 using the indirect method.
THE MANN CORPORATION
Consolidated Balance Sheets
As of Year-End ($ thousands)
2013
2012
Assets
Current assets
Cash
$400,000
$250,000
Accounts receivable (net)
990,000
760,000
Inventory
710,000
400,000
Prepaid expenses
100,000
100,000
Total current assets
2,200,000
1,510,000
Investments in affiliate companies
100,000
-
Property and equipment
1,310,000
800,000
Less: Accumulated depreciation
(110,000)
(80,000)
Property & equipment (net)
1,200,000
720,000
Total assets
$3,500,000
$2,230,000
Liabilities & Shareholders’ Equity
Current liabilities
Accounts payable
$570,000
$500,000
Accrued expenses payable
200,000
220,000
Dividends payable
70,000
-
Total current liabilities
840,000
720,000
Note payable—due in ten years
500,000
-
Total liabilities
1,340,000
720,000
Shareholders’ equity
Common stock, $5 par value
300,000
200,000
Additional paid-in-capital
1,200,000
1,160,000
Retained earnings
660,000
150,000
Total shareholders’ equity
2,160,000
1,510,000
Total liabilities & shareholders’ equity
$3,500,000
$2,230,000
Explanation / Answer
Cash Flow Statement Using Indirect Method:
NOTE : Dividends Paid is calculated as follows:
Beginning Retained Earnings + Net Income -Ending Retained Earnings - Dividends Payable
= 150000 + 600000 - 660000 - 70000 = $20,000
Cash flows from operating activities Net income $600,000 Adjustments for: Depreciation $30,000 630,000 Increase in accounts receivable -230,000 Increase in inventories -310,000 Increase in accounts payable 70,000 Decrease in accrued expenses payables -20,000 -490,000 Cash generated from operations 140,000 Cash flows from investing activities Purchase of property, plant, and equipment -510,000 Investment in Affiliate Companies -100,000 Net cash used in investing activities -610,000 Cash flows from financing activities Proceeds from issue of common stock 140,000 Proceeds from issuance of Notes Payable 500,000 Dividends Paid -20,000 Net cash used in financing activities 620,000 Net increase in cash and cash equivalents 150,000 Cash and cash equivalents at beginning of period 250,000 Cash and cash equivalents at end of period 400,000Related Questions
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