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20 Feb
2021

Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the…

Category:ACADEMICIAN

SOLUTION AT Australian Expert Writers

Problem 12-2AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4
Forten Company, a merchandiser, recently completed its calendar-year 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s balance sheets and income statement follow.
FORTEN COMPANY Comparative Balance Sheets December 31, 2013 and 20122013   2012AssetsCash $ 49,200      $ 73,000Accounts receivable   65,890        57,000Merchandise inventory   276,500        253,000Prepaid expenses   1,250        1,900Equipment   158,000        106,500Accum. depreciation—Equipment   (36,500)       (46,000)
Total assets $ 514,340      $ 445,400
Liabilities and EquityAccounts payable $ 63,590      $ 111,000Short-term notes payable   10,000        6,000Long-term notes payable   62,500        48,250Common stock, $5 par value   162,250        150,750Paid-in capital in excess of par, common stock   34,500        0Retained earnings   181,500        129,400
Total liabilities and equity $ 514,340      $ 445,400
FORTEN COMPANY Income Statement For Year Ended December 31, 2013Sales       $ 582,500Cost of goods sold         289,000
Gross profit         293,500Operating expensesDepreciation expense $ 20,000Other expenses   134,000       154,000
Other gains (losses)Loss on sale of equipment         (5,500)
Income before taxes         134,000Income taxes expense         25,500
Net income       $ 108,500
Additional Information on Year 2013 Transactions
a. Net income was $108,500.b. Accounts receivable increased.c. Merchandise inventory increased.d. Prepaid expenses decreased.e. Accounts payable decreased.f. Depreciation expense was $20,000.g. Sold equipment costing $46,500, with accumulated depreciation of $29,500, for $11,500 cash. This yielded a loss of $5,500.h. Purchased equipment costing $98,000 by paying $30,000 cash and (i.) by signing a long-term note payable for the balance.j. Borrowed $4,000 cash by signing a short-term note payable.k. Paid $53,750 cash to reduce the long-term notes payable.l. Issued 2,300 shares of common stock for $20 cash per share.m. Declared and paid cash dividends of $56,400.
Required:Prepare a complete statement of cash flows using a spreadsheet; report its operating activities using the indirect method. (Enter all amounts as positive values.)
Golden Corp., a merchandiser, recently completed its 2013 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. The company’s balance sheets and income statement follow.
hiododf CORPORATIONComparative Balance SheetsDecember 31, 2013 and 20122013 2012AssetsCash $ 163,000 $ 135,000Accounts receivable 84,000 72,000Merchandise inventory 625,000 515,000Equipment 345,000 269,000Accum. depreciation—Equipment (156,000) (103,000)
Total assets $ 1,061,000 $888,000
Liabilities and EquityAccounts payable $ 164,000 $ 103,000Income taxes payable 26,000 23,000Common stock, $2 par value 590,000 568,000Paid-in capital in excess of par value, common stock 197,000 164,000Retained earnings 84,000 30,000
Total liabilities and equity $ 1,061,000 $ 888,000
GOLDEN CORPORATIONIncome StatementFor Year Ended December 31, 2013Sales $ 1,800,000Cost of goods sold 1,088,000
Gross profit 712,000Operating expensesDepreciation expense $ 53,000Other expenses 499,000 552,000Income before taxes 160,000Income taxes expense 21,000Net income $ 139,000
Additional Information on Year 2013 Transactionsa. Purchased equipment for $76,000 cash.b. Issued 11,000 shares of common stock for $5 cash per share.c. Declared and paid $85,000 in cash dividends.
Required:Prepare a complete statement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method. (Amounts to be deducted should be indicated with a minus sign.)

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