1. Cash flow information: Direct and indirect methods;The comparative year-end balance sheets of Sign Graphics, Inc., revealed the following activity...
1. Cash flow information: Direct and indirect methods;The comparative year-end balance sheets of Sign Graphics, Inc., revealed the following activity in the company's current accounts;20X5;20X4;Increase / Decrease);Current assets;Cash;$55,400;$35,200;$20,200;Accounts receivable (net);83,800;88,000;-4,200;Inventory;243,400;233,800;9,600;Prepaid expenses;25,400;24,200;1,200;Current liabilities;Accounts payable;$123,600;$140,600;($17,000);Taxes payable;43,600;49,200;-5,600;Interest payable;9,000;6,400;2,600;Accrued liabilities;38,800;60,400;-21,600;Note payable;44,000;?;44,000;The accounts payable were for the purchase of merchandise. Prepaid expenses and accrued liabilities relate to the firm's selling and administrative expenses. The company's condensed income statement follows.;SIGN GRAPHICS INC.;Income Statement;for the Year Ended December 31, 20x5;Sales;$713,800;Less: Cost of goods sold;323,000;Gross profit;$390,800;Less: Selling & administrative expenses;$186,000;Depreciation expense;17,000;Interest expense;27,000;230,000;Add: gain on sale of land;$160,800;21,800;Income before taxes;$182,600;Income taxes;36,800;Net income;$145,800;Other data;1. Long-term investments were purchased for cash at a cost of $74,600.;2. Cash proceeds from the sale of land totaled $76,200.;3. Store equipment of $44,000 was purchased by signing a short-term note payable. Also, a $150,000 telecommunications system was acquired by issuing 3,000 shares of preferred stock.;4. A long-term note of $49,400 was repaid.;5. Twenty thousand shares of common stock were issued at $5.19 per share.;6. The company paid cash dividends amounting to $128,600.;Instructions;a. Prepare the operating activities section of the company's statement of cash flows, assuming use of;1. The direct method.;2. The indirect method.;b. Prepare the investing and financing activities sections of the statement of cash flows.
Paper#80029 | Written in 18-Jul-2015Price : $22