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ACC350 problem 14-14

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Question;Calculation of depreciation to add back to Net Income:Accumulated Depreciation, beginning balanceAccumulated Depreciation, ending balanceDebits to Accumulated DepreciationCredits to Accumulated DepreciationChanges in noncash balance sheet accounts that impact net income:Increase inAccountBalanceCurrent AssetsAccounts receivableInventoryPrepaid expensesDecrease inAccountBalanceCurrent LiabilitiesAccounts PayableAccrued liabilitiesIncome taxes payableChanges in noncash balance sheet accounts that impact investing and financing:Noncurrent AssetsProperty, plant, and equipmentLong-term investmentsIncrease inAccountBalanceDecrease inAccountBalanceLiabilities and Stockholders' equityBonds payableCommon stockProperty, Plant and EquipmentProperty, Plant and Equipment, beginning balanceProperty, Plant and Equipment, ending balanceDebits to Property, Plant and EquipmentCredits to Property, Plant and EquipmentRetained EarningsRetained Earnings, beginning balanceRetained Earnings, ending balanceDebits to Retained EarningsCredits to Retained EarningsALLIED COMPANYStatement of Cash FlowsFor the Year Ended December 31, 2011Operating activities:Net incomeAdjustments needed to convert net income to a cash basis:Net cash provided by operating activitiesInvesting activities:Net cash used for investing activitiesFinancing activities:Net cash provided by financing activitiesNet decrease in cashCash balance, Beginning of yearCash balance, End of year3. Free cash flow computationNet cash provided by operating activitiesCapital expendituresDividendsFree cash flowGiven Data P14-14:Minimum cash balance$20,000ALLIED COMPANYComparative Balance SheetDecember 31, 2011, and 201020112010AssetsCurrent assets:CashAccounts receivableInventoryPrepaid expensesTotal current assetsLong-term investmentsPlant and equipmentLess accumulated depreciationNet plant and equipmentTotal assets$15,000200,000250,0007,000472,00090,000860,000210,000650,000$1,212,000Liabilities and Stockholders' EquityCurrent liabilities:Accounts payable$175,000Accrued liabilities$8,000Income taxes payable42,000Total current liabilities225,000Bonds payable200,000Total liabilities425,000Stockholders' equity:Common stock595,000Retained earnings192,000Total stockholders' equity787,000Total liabilities and stockholders' equity$1,212,000$33,000210,000196,00015,000454,000120,000750,000190,000560,000$1,134,000$230,000$15,00039,000284,000100,000384,000600,000150,000750,000$1,134,000ALLIED COMPANYIncome StatementFor the Year Ended December 31, 2011SalesCost of goods soldGross marginSelling and administrative expensesNet operating incomeNonoperating items:Gain on sale of investmentsLoss on sales of equipmentIncome before taxesIncome taxesNet income$800,000500,000300,000214,00086,000$20,0006,000Additional information:Long-term investment costLong-term investment saleEquipment costEquipment accumulated depreciationEquipment selling priceDividends declared and paidStock was repurchased for cash$30,000$50,000$90,000$40,000$44,000??14,000100,00030,000$70,000

 

Paper#43645 | Written in 18-Jul-2015

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