Chapter 12: 8PSB (page 581)
Refer to Satu Company’s financial statements and related information in Problem 12-6B.
Required
Prepare a complete statement of cash flows; report its cash flows from operating activities according to the direct method.
Net changes in cash$30,350.
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When a spreadsheet for a statement of cash flows is prepared, all changes in noncash balance sheet accounts are fully explained on the spreadsheet. Explain how these noncash balance sheet accounts are used to fully account for cash flows on a spreadsheet
Refer to the data in QS 12-11.
The following financial statements and additional information are reported
IKIBAN INC. Income Statement For Year Ended June 30, 2017 | |
Sales | \(678,000 |
Cost of goods sold | 411,000 |
Gross profit | 267,000 |
Operating expenses | |
Depreciation expense \)58,600 | |
Other expenses 67,000 | |
Total operating expenses | 125,600 |
141,400 | |
Other gains (losses) | |
Gain on sale of equipment | 2,000 |
Income before taxes | 143,400 |
Income taxes expense | 43,890 |
Net income | \( 99,510 |
IKIBAN INC. Comparative Balance Sheets June 30, 2017 and 2016 | ||
Assets | 2017 | 2016 |
Cash | \) 87,500 | \( 44,000 |
Accounts receivable, net | 65,000 | 51,000 |
Inventory | 63,800 | 86,500 |
Prepaid expenses | 4,400 | 5,400 |
Total current assets | 220,700 | 186,900 |
Equipment | 124,000 | 115,000 |
Accum. depreciation—Equipment | (27,000) | (9,000) |
Total assets | \)317,700 | \(292,900 |
Liabilities and Equity | ||
Accounts payable | \) 25,000 | \( 30,000 |
Wages payable | 6,000 | 15,000 |
Income taxes payable | 3,400 | 3,800 |
Total current liabilities | 34,400 | 48,800 |
Notes payable (long term) | 30,000 | 60,000 |
Total liabilities | 64,400 | 108,800 |
Equity | ||
Common stock, \)5 par value | 220,000 | 160,000 |
Retained earnings | 33,300 | 24,100 |
Total liabilities and equity | \(317,700 | \)292,900 |
Additional Information
Required
If a company reports positive net income for the year, can it also show a net cash outflow from operating activities? Explain.
Use the following financial statements and additional information to
MONTGOMERY INC. Comparative Balance Sheets December 31, 2018, and 2017 | ||
2018 | 2017 | |
Assets | ||
Cash | \( 30,400 | \) 30,550 |
Accounts receivable, net | 10,050 | 12,150 |
Inventory | 90,100 | 70,150 |
Total current assets | 130,550 | 112,850 |
Equipment | 49,900 | 41,500 |
Accum. depreciation—Equipment | (22,500) | (15,300) |
Total assets | \(157,950 | \)139,050 |
Liabilities and Equity | ||
Accounts payable | 23,900 | \( 25,400 |
Salaries payable | 500 | 600 |
Total current liabilities | 24,400 | 26,000 |
Equity | ||
Common stock, no par value | 110,000 | 100,000 |
Retained earnings | 23,550 | 13,050 |
Total liabilities and equity | \)157,950 | \(139,050 |
MONTGOMERY INC. Income Statement For Year Ended December 31, 2018 | |
Sales | \)45,575 |
Cost of goods sold | (18,950) |
Gross profit | 26,625 |
Operating expenses | |
Depreciation expense \(7,200 | |
Other expenses 5,550 | |
Total operating expense | 12,750 |
Income before taxes | 13,875 |
Income tax expense | 3,375 |
Net income | \)10,500 |
Additional Information
a. No dividends are declared or paid in 2018.
b. Issued additional stock for $10,000 cash in 2018.
c. Purchased equipment for cash in 2018; no equipment was sold in 2018.
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