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28 Sep 2019
A comparative balance sheet for Riabko Company containing data for the last two years is as follows:
Riabko Company
Comparative Balance Sheet This
Year Last
Year Assets Current assets: Cash and cash equivalents $ 96,000 $ 70,000 Accounts receivable 640,000 672,500 Inventory 638,000 445,000 Prepaid expenses 30,000 17,500 Total current assets 1,404,000 1,205,000 Property, plant, and equipment 2,495,000 1,900,000 Less accumulated depreciation 645,000 582,500 Net property, plant, and equipment 1,850,000 1,317,500 Long-term investments 132,500 205,000 Loans to subsidiaries 145,000 82,500 Total assets
$ 3,531,500 $ 2,810,000 Liabilities and Stockholders' equity Current liabilities Accounts payable $ 910,000 $ 595,000 Accrued liabilities 40,000 64,500 Income taxes payable 165,500 138,000 Total current liabilities 1,115,500 797,500 Bonds payable 745,000 475,000 Total liabilities 1,860,500 1,272,500 Stockholdersâ equity: Common stock 1,140,000 1,025,000 Retained earnings 531,000 512,500 Total stockholdersâ equity 1,671,000 1,537,500 Total liabilities and stockholders' equity $ 3,531,500 $ 2,810,000
The following additional information is available about the companyâs activities during this year: a. The company declared and paid a cash dividend this year. b. Bonds with a principal balance of $405,000 were repaid during this year. c. Equipment was sold during this year for $82,500. The equipment had cost $180,000 and had $70,000 in accumulated depreciation on the date of sale. d. Long-term investments were sold during the year for $160,000. These investments had cost $72,500 when purchased several years ago. e. The subsidiaries did not repay any outstanding loans during the year. f. Riabko did not repurchase any of its own stock during the year.
The company reported net income this year as follows:
Riabko Company
Income Statement Sales $ 3,500,000 Cost of goods sold 2,170,000 Gross margin 1,330,000 Selling and administrative expenses
1,062,500 Net operating income 267,500 Non operating items: Gain on sale of investments $ 87,500 Loss on sale of equipment 27,500 60,000 Income before taxes 327,500 Income taxes
105,000 Net income $ 222,500
Required: 1. Using the indirect method, prepare a statement of cash flows for this year
A comparative balance sheet for Riabko Company containing data for the last two years is as follows: |
Riabko Company Comparative Balance Sheet | ||||
This Year | Last Year | |||
Assets | ||||
Current assets: | ||||
Cash and cash equivalents | $ | 96,000 | $ | 70,000 |
Accounts receivable | 640,000 | 672,500 | ||
Inventory | 638,000 | 445,000 | ||
Prepaid expenses | 30,000 | 17,500 | ||
Total current assets | 1,404,000 | 1,205,000 | ||
Property, plant, and equipment | 2,495,000 | 1,900,000 | ||
Less accumulated depreciation | 645,000 | 582,500 | ||
Net property, plant, and equipment | 1,850,000 | 1,317,500 | ||
Long-term investments | 132,500 | 205,000 | ||
Loans to subsidiaries | 145,000 | 82,500 | ||
Total assets | $ | 3,531,500 | $ | 2,810,000 |
Liabilities and Stockholders' equity | ||||
Current liabilities | ||||
Accounts payable | $ | 910,000 | $ | 595,000 |
Accrued liabilities | 40,000 | 64,500 | ||
Income taxes payable | 165,500 | 138,000 | ||
Total current liabilities | 1,115,500 | 797,500 | ||
Bonds payable | 745,000 | 475,000 | ||
Total liabilities | 1,860,500 | 1,272,500 | ||
Stockholdersâ equity: | ||||
Common stock | 1,140,000 | 1,025,000 | ||
Retained earnings | 531,000 | 512,500 | ||
Total stockholdersâ equity | 1,671,000 | 1,537,500 | ||
Total liabilities and stockholders' equity | $ | 3,531,500 | $ | 2,810,000 |
The following additional information is available about the companyâs activities during this year: | |
a. | The company declared and paid a cash dividend this year. |
b. | Bonds with a principal balance of $405,000 were repaid during this year. |
c. | Equipment was sold during this year for $82,500. The equipment had cost $180,000 and had $70,000 in accumulated depreciation on the date of sale. |
d. | Long-term investments were sold during the year for $160,000. These investments had cost $72,500 when purchased several years ago. |
e. | The subsidiaries did not repay any outstanding loans during the year. |
f. | Riabko did not repurchase any of its own stock during the year. |
The company reported net income this year as follows: |
Riabko Company Income Statement | ||||
Sales | $ | 3,500,000 | ||
Cost of goods sold | 2,170,000 | |||
Gross margin | 1,330,000 | |||
Selling and administrative expenses | 1,062,500 | |||
Net operating income | 267,500 | |||
Non operating items: | ||||
Gain on sale of investments | $ | 87,500 | ||
Loss on sale of equipment | 27,500 | 60,000 | ||
Income before taxes | 327,500 | |||
Income taxes | 105,000 | |||
Net income | $ | 222,500 | ||
Required: | |
1. | Using the indirect method, prepare a statement of cash flows for this year |
Trinidad TremblayLv2
28 Sep 2019