ACC 100 Lecture Notes - Cash Flow Statement, Retained Earnings, Accounts Payable
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1. Waterways sold a piece of company equipment for $24,000. The equipment had been used for ten years. It had cost $80,000 when purchases and had a 10-years life and a $6,000 salvage value. Straight-line depreciation was used.
2. Waterways purchased new equipment costing $209,200.
3. The division paid $50,000 in dividends.
Waterways Corporation - Installation Division | |||
Income Statement | |||
For the year ending December 31 | |||
Sales | $5,536,077 | ||
Less: Cost of goods sold | 3,132,777 | ||
Gross Profit | 2,403,300 | ||
Operating expenses: | |||
Advertising | $50,000 | ||
Insurance | 400,000 | ||
Salaries and wages | 584,640 | ||
Depreciation | 71,319 | ||
Other operating expenses | 21,200 | ||
Total operating expenses | 1,127,159 | ||
Income from operations | 1,276,141 | ||
Other income | |||
Gain on sale of equip | 18,000 | ||
Other expenses | |||
Interest expense | (12,187) | ||
Net other income and expenses | 5,813 | ||
Income before income tax | 1,281,954 | ||
Income tax expenses | 384,586 | ||
Net income | $897,368 |
Waterways Corporation - Installation Division | ||||
Balance Sheet | ||||
December 31 | ||||
Assets | This Year | Last Year | ||
Current assets | ||||
Cash | $786,797 | $746,681 | ||
Accounts receivable | 680,750 | 542,685 | ||
Work in process | 702,159 | 0 | ||
Inventory | 16,766 | 7,500 | ||
Prepaid expenses | 76,550 | 42,590 | ||
Total current assets | 2,263,022 | 1,339,456 | ||
Property, plant, and equipment | ||||
Furnishings | 40,416 | 40,416 | ||
Equipment | 929,400 | 800,200 | ||
Buildings | 450,000 | 450,000 | ||
Land | 300,000 | 300,000 | ||
Accumulated depreciation | (482,523) | (485,204) | ||
Total property, plant, and equipment | 1,237,293 | 1,105,412 | ||
Total Assets | $3,500,315 | $2,444,868 | ||
Liabilities and Stockholders' Equity | ||||
Current liabilities | ||||
Accounts payable | $157,095 | $128,360 | ||
Income taxes payable | 101,344 | 79,989 | ||
Wages payable | 4,517 | 1,984 | ||
Interest payable | 1,187 | 0 | ||
Other current liabilities | 14,515 | 15,246 | ||
Revolving bank loan payable | 15,000 | 0 | ||
Total current liabilities | 293,658 | 225,579 | ||
Long-term liabilities | ||||
Notes payable | 140,000 | 0 | ||
Total liabilities | 433,658 | 225,579 | ||
Stockholders' equity | ||||
Common stock | 1,250,000 | 1,250,000 | ||
Retained earnings | 1,816,657 | 969,289 | ||
Total stockholders' equity | 3,066,657 | 2,219,289 | ||
Total liabilities and stockholders' equity | $3,500,315 | $2,444,868 |
Instructions:
a. Prepare a statement of cash flow using the indirect method for this year.
b. Determine free cash flow.
Hillside,Inc. | ||||||||
BALANCE SHEET | INCOME STATEMENT | |||||||
($ in millions) | ($ in millions) | |||||||
ASSETS | LIABILITIES | Revenue | 28,681.10 | |||||
Cash & Marketable Securities | 449.90 | Accounts Payable | 1,611.20 | Cost Of Goods Sold | 20,768.80 | |||
Accounts Receivable | 954.80 | Salaries Payable | 225.20 | Gross Profit | 7,912.30 | |||
Inventories | 3,645.20 | Other Current Liabilities | 1,118.80 | |||||
Other Current Assets | 116.60 | Total Current Liabilities | 2,955.20 | Operating Expenses: | ||||
Total Current Assets | 5,166.50 | Selling, General & Admin. | 5,980.80 | |||||
Other Liabilities | 693.40 | Depreciation | 307.30 | |||||
Machinery & Equipment | 1,688.90 | Operating income | 1,624.20 | |||||
Land | 1,129.70 | Total Liabilities | 3,648.60 | |||||
Buildings | 2,348.40 | Interest | - | |||||
Depreciation | (575.60) | SHAREHOLDER'S EQUITY | Other Expense (Income) | (13.10) | ||||
Property, Plant & Equip. - Net | 4,591.40 | Common Stock | 828.50 | Income Before Taxes | 1,637.30 | |||
Other Long Term Assets | 120.90 | Retained Earnings | 5,401.70 | Income Taxes | 618.10 | |||
Total Long-Term Assets | 4,712.30 | Total Shareholder's Equity | 6,230.20 | Net Income | 1,019.20 | |||
Total Assets | 9,878.80 | Total Liabilities & Equity | 9,878.80 | |||||
Number of Common Stock | ||||||||
Shares Outstanding | 1,032,271 | |||||||
Input Answers Below | Financial Performance Summary | |||||||
LIQUIDITY RATIOS | ||||||||
Current Ratio (times) | ||||||||
Quick Ratio (times) | ||||||||
Average Payment Period (days) | ||||||||
ASSET MANAGEMENT RATIOS | ||||||||
Total Asset Turnover (times) | ||||||||
Average Collection Period (days) | ||||||||
Inventory Turnover (times) | ||||||||
FINANCIAL LEVERAGE RATIOS | ||||||||
Total Debt to Total Assets | ||||||||
Equity Multiplier (times) | ||||||||
PROFITABILITY RATIOS | ||||||||
Operating Profit Margin | ||||||||
Net Profit Margin | ||||||||
Return on Total Assets | ||||||||
Return on Equity | ||||||||
Earnings per Share |