The net changes in the balance sheet accounts of Eusey, Inc. forthe year 2011 are shown below:
Account Debit Credit
Cash dr $ 265,600
Accounts receivable cr $ 64,000
Allowance for doubtful accounts cr 14,000
Inventory dr 287,200
Prepaid expenses dr 40,000
Long-term investments cr 144,000
Land dr 300,000
Buildings dr 600,000
Machinery dr 100,000
Office equipment cr 28,000
Accumulated depreciation:
Buildings cr 24,000
Machinery dr 20,000
Office equipment dr 12,000
Accounts payable dr 233,200
Accrued liabilities cr72,000
Dividends payable cr 128,000
Bonds payable cr 940,000
Preferred stock ($50 par) dr 60,000
Common stock ($10 par) cr 156,000
Additional paid-in capitalâcommon cr 247,200
Retained earnings cr 60,800
Totals $1,898,000 $1,898,000
Additional information:
1.Unaudited Income Statement Data for Year Ended December 31,2011
Income before extraordinary items $420,000
Extraordinary losses: Condemnation of land $132,000
Loss from redemption of preferred stock 20,000 (152,000)
Net income $268,000
2. Cash dividends of $128,000 were declared December 15, 2011,payable January 15, 2012. A 5% stock dividend was issued March 31,2011, when the market value was $22.00 per share.
3. The long-term investments were sold at a $4,000 loss.
4. A building and land which cost $480,000 and had a book value of$300,000 were sold for $400,000. The cost of the land, included inthe cost and book value above, was $20,000.
5. The following entry was made to record an exchange of an oldmachine for a new one:
Machinery dr 160,000
Accumulated DepreciationâMachinery dr 40,000
Machinery cr 60,000
Bonds Payable cr 140,000
6. A fully depreciated copier machine which cost $28,000 waswritten off.
7. Preferred stock of $60,000 par value was redeemed for $80,000;the loss was charged against earnings.
8. The company issued 12,000 shares of its common stock on June 15,2011 for $27 a share. A $2 per share broker underwriting fee wasrecognized as part of Professional Fees Expense in the operatingsection of the income statement. There were 87,600 sharesoutstanding on December 31, 2011.
9. Bonds were issued at 104 on December 31, 2011. The premium wascredited to Interest Revenue.
10. Land that was condemned had a book value of $240,000.
Requirements:
1. Prepare a properly formatted and complete statement of cashflows using the indirect method. Ignore tax effects.
The net changes in the balance sheet accounts of Eusey, Inc. forthe year 2011 are shown below:
Account Debit Credit
Cash dr $ 265,600
Accounts receivable cr $ 64,000
Allowance for doubtful accounts cr 14,000
Inventory dr 287,200
Prepaid expenses dr 40,000
Long-term investments cr 144,000
Land dr 300,000
Buildings dr 600,000
Machinery dr 100,000
Office equipment cr 28,000
Accumulated depreciation:
Buildings cr 24,000
Machinery dr 20,000
Office equipment dr 12,000
Accounts payable dr 233,200
Accrued liabilities cr72,000
Dividends payable cr 128,000
Bonds payable cr 940,000
Preferred stock ($50 par) dr 60,000
Common stock ($10 par) cr 156,000
Additional paid-in capitalâcommon cr 247,200
Retained earnings cr 60,800
Totals $1,898,000 $1,898,000
Additional information:
1.Unaudited Income Statement Data for Year Ended December 31,2011
Income before extraordinary items $420,000
Extraordinary losses: Condemnation of land $132,000
Loss from redemption of preferred stock 20,000 (152,000)
Net income $268,000
2. Cash dividends of $128,000 were declared December 15, 2011,payable January 15, 2012. A 5% stock dividend was issued March 31,2011, when the market value was $22.00 per share.
3. The long-term investments were sold at a $4,000 loss.
4. A building and land which cost $480,000 and had a book value of$300,000 were sold for $400,000. The cost of the land, included inthe cost and book value above, was $20,000.
5. The following entry was made to record an exchange of an oldmachine for a new one:
Machinery dr 160,000
Accumulated DepreciationâMachinery dr 40,000
Machinery cr 60,000
Bonds Payable cr 140,000
6. A fully depreciated copier machine which cost $28,000 waswritten off.
7. Preferred stock of $60,000 par value was redeemed for $80,000;the loss was charged against earnings.
8. The company issued 12,000 shares of its common stock on June 15,2011 for $27 a share. A $2 per share broker underwriting fee wasrecognized as part of Professional Fees Expense in the operatingsection of the income statement. There were 87,600 sharesoutstanding on December 31, 2011.
9. Bonds were issued at 104 on December 31, 2011. The premium wascredited to Interest Revenue.
10. Land that was condemned had a book value of $240,000.
Requirements:
1. Prepare a properly formatted and complete statement of cashflows using the indirect method. Ignore tax effects.
