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Prepare a complete statement of cash flows

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Please see pdf file.;Forten Company, a merchandiser, recently completed its calendar-year 2008 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. Forten's balance sheets and income statement follow;FORTEN COMPANY;Comparative Balance Sheets;December 31, 2008 and 2007;2008 2007;Assets;Cash $ 49,800 $ 73,500;Accounts receivable 65,810 50,625;Merchandise inventory 275,656 251,800;Prepaid expenses 1,250 1,875;Equipment 157,500 108,000;Accum. depreciation-Equipment (36,625) (46,000);Total assets $513,391 $439,800;Liabilities and Equity;Accounts payable $ 53,141 $114,675;Short-term notes payable 10,000 6,000;Long-term notes payable 65,000 48,750;Common stock, $5 par value 162,750 150,250;Paid-in capital in excess of par, common stock 37,500 0;Retained earnings 185,000 120,125;Total liabilities and equity $513,391 $439,800;FORTEN COMPANY;Income Statement;For Year Ended December 31, 2008;Sales $582,500;Cost of goods sold 285,000;Gross profit 297,500;Operating expenses;Depreciation expense $ 20,750;Other expenses 132,400 153,150;Other gains (losses);Loss on sale of equipment 5,125;Income before taxes $139,125;Income taxes expense 24,250;Net income $114,975;Additional Information on Year 2008 Transactions;a. The loss on the cash sale of equipment was $5,125 (details in b).;b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash.;c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the;balance.;d. Borrowed $4,000 cash by signing a short-term note payable.;e. Paid $50,125 cash to reduce the long-term notes payable.;f. Issued 2,500 shares of common stock for $20 cash per share.;g. Declared and paid cash dividends of $50,100.;Required;Prepare a complete statement of cash flows, report its operating activities using the indirect method.;Problem 12-1A: Statement of cash flows (indirect method) L.O. C2, C3, A1, P1, P2, P3;Forten Company, a merchandiser, recently completed its calendar-year 2008 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. Forten's balance sheets and income statement follow;FORTEN COMPANY;Comparative Balance Sheets;December 31, 2008 and 2007;2008 2007;Assets;Cash $ 49,800 $ 73,500;Accounts receivable 65,810 50,625;Merchandise inventory 275,656 251,800;Prepaid expenses 1,250 1,875;Equipment 157,500 108,000;Accum. depreciation--Equipment (36,625) (46,000);Total assets $513,391 $439,800;Liabilities and Equity;Accounts payable $ 53,141 $114,675;Short-term notes payable 10,000 6,000;Long-term notes payable 65,000 48,750;Common stock, $5 par value 162,750 150,250;Paid-in capital in excess of par, common stock 37,500 0;Retained earnings 185,000 120,125;Total liabilities and equity $513,391 $439,800;FORTEN COMPANY;Income Statement;For Year Ended December 31, 2008;Sales $582,500;Cost of goods sold 285,000;Gross profit 297,500;Operating expenses;Depreciation expense $ 20,750;Other expenses 132,400 153,150;Other gains (losses);Loss on sale of equipment 5,125;Income before taxes $139,125;Income taxes expense 24,250;Net income $114,975;Additional Information on Year 2008 Transactions;a. The loss on the cash sale of equipment was $5,125 (details in b).;b. Sold equipment costing $46,875, with accumulated depreciation of $30,125, for $11,625 cash.;c. Purchased equipment costing $96,375 by paying $30,000 cash and signing a long-term note payable for the;balance.;d. Borrowed $4,000 cash by signing a short-term note payable.;e. Paid $50,125 cash to reduce the long-term notes payable.;f. Issued 2,500 shares of common stock for $20 cash per share.;g. Declared and paid cash dividends of $50,100.;Required;Prepare a complete statement of cash flows, report its operating activities using the indirect method. (Negative;amount should be indicated by a minus sign. Omit the "$" sign in your response.);FORTEN COMPANY;Statement of Cash Flows;For Year Ended December 31, 2008;Cash flows from operating activities;Net income $ 114975;Adjustments to reconcile net income to net cash provided by;operating activities;Accounts receivable;Inventory;Prepaid expenses;Accounts payable;20750;Net cash provided by operating activities $;Cash flows from investing activities;Net cash used in investing activities;Cash flows from financing activities;Net cash used in financing activities;$;Cash balance at December 31, 2007;Cash balance at December 31, 2008 $

 

Paper#27225 | Written in 18-Jul-2015

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