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Comparative balance sheet accounts of Jensen Company are presented below.

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P23-8 Comparative balance sheet accounts of Jensen Company are presented below.;JENSEN COMPANY;COMPARATIVE BALANCE SHEET ACCOUNTS;DECEMBER 31;Debit Balances 2007 2006;Cash $80,000 $51,000;Accounts receivable 145,000 130,000;Merchandise inventory 75,000 61,000;Investments;(Available-for-sale) 55,000 85,000;Equipment 70,000 48,000;Buildings 145,000 145,000;Land 40,000 25,000;Totals $610,000 $545,000;Credit Balances;Allowance for Doubtful Accounts $10,000 $8,000;Accumulated Depreciation - Equipment 21,000 14,000;Accumulated Depreciation - Building 37,000 28,000;Accounts payable 70,000 60,000;Income taxes payable 12,000 10,000;Long-term notes payable 62,000 70,000;Common stock 310,000 260,000;Retained earnings 88,000 95,000;Totals $610,000 $545,000;Additional data;1. Equipment that cost $10,000 and was 40% depreciated was sold in 2007.;2. Cash dividends were declared and paid during the year.;3. Common stock was issued in exchange for land.;4. Investments that cost $35,000 were sold during the year.;Jensen's 2007 income statement is as follows.;Sales $950,000;Less: Cost of goods sold 600,000;Gross profit 350,000;Less: Operating expenses (includes deprecation and bad debt expense);250,000;Income from operations 100,000;Other revenues and expenses;Gain on sale of investments $15,000;Loss on sale of equipment (3,000) 12,000;Income before taxes 112,000;Income taxes 45,000;Net income $67,000;Instructions;a. Compute net cash provided by operating activities under the direct method.;b. Prepare a statement of cash flows using the indirect method.;Compute net cash provided by operating activities under the direct method.;Next is cash paid for income taxes.

 

Paper#27770 | Written in 18-Jul-2015

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