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QS 16-17 Indirect: Preparation of statement of cash flows - MONTGOMERY INC

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QS 16-17 Indirect: Preparation of statement of cash flows LO P1;MONTGOMERY INC.;Comparative Balance Sheets;December 31, 2014 and 2013;2014 2013;Assets;Cash $ 30,400 $ 30,550;Accounts receivable, net 10,050 12,150;Inventory 90,100 70,150;Equipment 49,900 41,500;Accum. depreciation?Equipment (22,500 ) (15,300 );Total assets $ 157,950 $ 139,050;Liabilities and Equity;Accounts payable $ 23,900 $ 25,400;Salaries payable 500 600;Common stock, no par value 110,000 100,000;Retained earnings 23,550 13,050;Total liabilities and equity $ 157,950 $ 139,050;MONTGOMERY INC.;Income Statement;For Year Ended December 31, 2014;Sales $ 45,575;Cost of goods sold (18,950 );Gross profit 26,625;Operating expenses;Depreciation expense $ 7,200;Other expenses 5,550;Total operating expense 12,750;Income before taxes 13,875;Income tax expense 3,375;Net income $ 10,500;Additional Information;a. No dividends are declared or paid in 2014.;b. Issued additional stock for $10,000 cash in 2014.;c. Purchased equipment for cash in 2014, no equipment was sold in 2014.;(1);Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2014, using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)

 

Paper#76822 | Written in 18-Jul-2015

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