Details of this Paper

Problem 12-2AA Indirect: Cash flows spreadsheet LO

Description

solution


Question

Question;Problem 12-2AA Indirect: Cash flows spreadsheet LO P1, P2, P3, P4Forten 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 201220132012 Assets Cash$49,200 $73,000 Accounts receivable65,890 57,000 Merchandise inventory276,500 253,000 Prepaid expenses1,250 1,900 Equipment158,000 106,500 Accum. depreciation?Equipment(36,500) (46,000) Total assets$514,340 $445,400 Liabilities and Equity Accounts payable$63,590 $111,000 Short-term notes payable10,000 6,000 Long-term notes payable62,500 48,250 Common stock, $5 par value162,250 150,750 Paid-in capital in excess of par, common stock34,500 0 Retained earnings181,500 129,400 Total liabilities and equity$514,340 $445,400 FORTEN COMPANY Income Statement For Year Ended December 31, 2013 Sales$582,500 Cost of goods sold289,000 Gross profit293,500 Operating expenses Depreciation expense$20,000 Other expenses134,000 154,000 Other gains (losses) Loss on sale of equipment(5,500) Income before taxes134,000 Income taxes expense25,500 Net income$108,500 Additional Information on Year 2013 Transactionsa.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.)

 

Paper#43474 | Written in 18-Jul-2015

Price : $22
SiteLock