Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows: Ending Balance Beginning Balance Cash $ 48,000 $ 57,000 Accounts receivable 41,000 44,000 Inventory 55,000 50,000 Total current assets 144,000 151,000 Property, plant, and equipment 150,000 140,000 Less accumulated depreciation 50,000 35,000 Net property, plant, and equipment 100,000 105,000 Total assets $ 244,000 $ 256,000 Accounts payable $ 32,000 $ 57,000 Income taxes payable 25,000 28,000 Bonds payable 60,000 50,000 Common stock 70,000 60,000 Retained earnings 57,000 61,000 Total liabilities and stockholders’ equity $ 244,000 $ 256,000 During the year, Ravenna paid a $6,000 cash dividend and it sold a piece of equipment for $3,000 that had originally cost $6,000 and had accumulated depreciation of $4,000. The company did not retire any bonds or repurchase any of its own common stock during the year. 2. What net income would the company include on its statement of cash flows?
Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows: Ending Balance Beginning Balance Cash $ 48,000 $ 57,000 Accounts receivable 41,000 44,000 Inventory 55,000 50,000 Total current assets 144,000 151,000 Property, plant, and equipment 150,000 140,000 Less accumulated depreciation 50,000 35,000 Net property, plant, and equipment 100,000 105,000 Total assets $ 244,000 $ 256,000 Accounts payable $ 32,000 $ 57,000 Income taxes payable 25,000 28,000 Bonds payable 60,000 50,000 Common stock 70,000 60,000 Retained earnings 57,000 61,000 Total liabilities and stockholders’ equity $ 244,000 $ 256,000 During the year, Ravenna paid a $6,000 cash dividend and it sold a piece of equipment for $3,000 that had originally cost $6,000 and had accumulated depreciation of $4,000. The company did not retire any bonds or repurchase any of its own common stock during the year. 2. What net income would the company include on its statement of cash flows?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Ravenna Company is a merchandiser that uses the indirect method to prepare the operating activities section of its statement of
| Ending Balance | Beginning Balance | ||||
| Cash | $ | 48,000 | $ | 57,000 | |
| 41,000 | 44,000 | ||||
| Inventory | 55,000 | 50,000 | |||
| Total current assets | 144,000 | 151,000 | |||
| Property, plant, and equipment | 150,000 | 140,000 | |||
| Less |
50,000 | 35,000 | |||
| Net property, plant, and equipment | 100,000 | 105,000 | |||
| Total assets | $ | 244,000 | $ | 256,000 | |
| Accounts payable | $ | 32,000 | $ | 57,000 | |
| Income taxes payable | 25,000 | 28,000 | |||
| Bonds payable | 60,000 | 50,000 | |||
| Common stock | 70,000 | 60,000 | |||
| 57,000 | 61,000 | ||||
| Total liabilities and |
$ | 244,000 | $ | 256,000 | |
During the year, Ravenna paid a $6,000 cash dividend and it sold a piece of equipment for $3,000 that had originally cost $6,000 and had accumulated depreciation of $4,000. The company did not retire any bonds or repurchase any of its own common stock during the year.
2. What net income would the company include on its statement of cash flows?
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