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28 Sep 2019
Presentedbelow are the 2011 income statement and comparative balance sheet for Siegfried & Royce. Siegfried & Royce Income Statement For the Year Ended December 31, 2011 ($ inthousands) Sales revenue $12,500 Operating expenses: Cost of goods sold 7300 Depreciation 400 Rent 250 Administrative and other 2200 Total operating expenses 10,150 Income before income taxes 2,350 Income tax expense 940 Net income $1,410 Balance Sheet information ($ in thousands) Dec. 31, 2011 Dec. 31, 2010 Assets: Cash $3,280 $1,300 Accounts receivable 1,250 980 Inventory 980 900 Prepaid rent 150 100 Plant & equipment 3,000 2,600 Less: Accumulated depreciation -1,200 -800 Totalassets $7,460 $5,080 Liabilities and shareholdersâ equity: Accounts payable $500 $580 Payables for administrative and other expenses 650 700 Income taxes payable 450 350 Note payable (due 12/31/2012) 2,500 2,000 Common stock 1,500 1,000 Retained earnings 1,860 450 Totalliabilities and shareholdersâ equity $7,460 $5,080
Required: Prepare a Statement of Cash Flows using the directmethod for operating activities. Assume that all purchases andsales of inventory are on account, and that there are noanticipated bad debts for accounts receivable.
TIP: Use T accounts for the pertinent items toisolate the information for the statement
Presentedbelow are the 2011 income statement and comparative balance | |||||||
sheet for Siegfried & Royce. | |||||||
Siegfried & Royce | |||||||
Income Statement | |||||||
For the Year Ended December 31, 2011 | |||||||
($ inthousands) | |||||||
Sales revenue | $12,500 | ||||||
Operating expenses: | |||||||
Cost of goods sold | 7300 | ||||||
Depreciation | 400 | ||||||
Rent | 250 | ||||||
Administrative and other | 2200 | ||||||
Total operating expenses | 10,150 | ||||||
Income before income taxes | 2,350 | ||||||
Income tax expense | 940 | ||||||
Net income | $1,410 | ||||||
Balance Sheet information ($ in thousands) | Dec. 31, 2011 | Dec. 31, 2010 | |||||
Assets: | |||||||
Cash | $3,280 | $1,300 | |||||
Accounts receivable | 1,250 | 980 | |||||
Inventory | 980 | 900 | |||||
Prepaid rent | 150 | 100 | |||||
Plant & equipment | 3,000 | 2,600 | |||||
Less: Accumulated depreciation | -1,200 | -800 | |||||
Totalassets | $7,460 | $5,080 | |||||
Liabilities and shareholdersâ equity: | |||||||
Accounts payable | $500 | $580 | |||||
Payables for administrative and other expenses | 650 | 700 | |||||
Income taxes payable | 450 | 350 | |||||
Note payable (due 12/31/2012) | 2,500 | 2,000 | |||||
Common stock | 1,500 | 1,000 | |||||
Retained earnings | 1,860 | 450 | |||||
Totalliabilities and shareholdersâ equity | $7,460 | $5,080 | |||||
Required: Prepare a Statement of Cash Flows using the directmethod for operating activities. Assume that all purchases andsales of inventory are on account, and that there are noanticipated bad debts for accounts receivable.
TIP: Use T accounts for the pertinent items toisolate the information for the statement
Casey DurganLv2
28 Sep 2019