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Chapman Company, a major retailer of bicycles and accessories

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Question;Problem;23-7;Chapman Company, a major retailer of bicycles and;accessories, operates several stores and is a publicly traded company. The;comparative balance sheet and income statement for Chapman as of May 31, 2014;are as follows. The company is preparing its statement of cash flows.;CHAPMAN COMPANY;COMPARATIVE BALANCE SHEET;AS OF MAY 31;2014;2013;Current assets;Cash;$28,730;$20,020;Accounts receivable;75,830;58,590;Inventory;220,960;250,350;Prepaid expenses;9,457;7,500;Total current assets;334,977;336,460;Plant assets;Plant assets;600,740;502,640;Less: Accumulated depreciation?plant assets;150,550;125,270;Net plant assets;450,190;377,370;Total assets;$785,167;$713,830;Current liabilities;Accounts payable;$123,890;$115,060;Salaries and wages payable;47,300;72,660;Interest payable;27,980;26,000;Total current liabilities;199,170;213,720;Long-term debt;Bonds payable;70,020;100,350;Total liabilities;269,190;314,070;Stockholders? equity;Common stock, $10 par;370,410;280,850;Retained earnings;145,567;118,910;Total stockholders? equity;515,977;399,760;Total liabilities and stockholders? equity;$785,167;$713,830;CHAPMAN COMPANY;INCOME STATEMENT;FOR THE YEAR ENDED MAY 31, 2014;Sales revenue;$1,256,130;Cost of goods sold;722,510;Gross profit;533,620;Expenses;Salaries and wages expense;253,040;Interest expense;75,510;Depreciation expense;25,280;Other expenses;8,420;Total expenses;362,250;Operating income;171,370;Income tax expense;43,460;Net income;$127,910;The following is additional information;concerning Chapman?s transactions during the year ended May 31, 2014.;1. All sales during the year were made on account.;2. All merchandise was purchased on account;comprising the total accounts payable account.;3. Plant assets costing $98,100 were purchased by;paying $25,400 in cash and issuing 7,270 shares of stock.;4. The ?other expenses? are related to prepaid;items.;5. All income taxes incurred during the year were;paid during the year.;6. In order to supplement its cash, Chapman issued;1,686 shares of common stock at par value.;7. Cash dividends of $101,253 were declared and paid;at the end of the fiscal year.;Prepare a statement of cash flows for Chapman;Company for the year ended May 31, 2014, using the direct method. (A;reconciliation of net income to net cash provided is not required.) (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis;e.g. (15,000).);CHAPMAN;COMPANY;Statement of Cash Flows (Partial);For the;Year Ended May 31, 2014;$;Cash payments;$;$;$;Using the indirect method, calculate only the net;cash flow from operating activities for Chapman Company for the year ended May;31, 2014.;CHAPMAN;COMPANY;Statement;of Cash Flows (Partial);For the;Year Ended May 31, 2014;$;Adjustments to;reconcile net income to;$;$;Question Attempts: 0 of 3 used

 

Paper#48079 | Written in 18-Jul-2015

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