0008 Problem 14 The operations of The McKenzie, a small lodging operation, are becoming more complex. Ms. Jo McKenzie, the owner, has asked for your help in preparing her statement of cash flows. She is able to present you with condensed balance sheets and some additional information. The McKenzie Condensed Balance Sheets ibl m noin 20X3 bodn 20X4 December 31, 20X3 and 20X4 0000 $ 6,000 25,500 5,000 325,000 Cash 10,000 26,500 int 10,000 200,000 as (20,000) $226,500 Accounts Receivable Investments Equipment Accumulated Depreciation (40,000) $321,500 Ma Total Assets GO0.08 Current Liabilities: l$ 18,000 5,000 5,000 Accounts Payable Mortgage Payable (Current) Dividends Payable $21,000 5,000 5,000 Noncurrent Liabilities: Mortgage Payable Notes Payable 75,000 70,000 40,000 Common Stock 00.01 Retained Earnings0 Total Liabilities and Owners' Equity 50,000 100,000 73,500 80,500 $226,500 $321,500 Additional information for 20X4: 1. Equipment that cost $20,000 depreciated to its salvage value of $2,000 and was sold for $8,000. 2. Common stock, purchased as a long-term investment for $5,000, was sold for $15,000. 3. Dividends declared totaled $15,000. up 4. Equipment was purchased for $145,000. 5. Depreciation expense totaled $38,000. Long-term debt of $5,000 was reclassified as current and $5,000 of long-term debt was dod isa all 00022 6. 7. Common stock of $50,000 was sold and long-term debt of $40,000 (note payable) was borrowed. 8. The McKenzie generated net income of $22,000. Required: Prepare the SCF as requested by Ms. McKenzie using the indirect method. o Iatste s 9 Challenge Problems Problem 15
0008 Problem 14 The operations of The McKenzie, a small lodging operation, are becoming more complex. Ms. Jo McKenzie, the owner, has asked for your help in preparing her statement of cash flows. She is able to present you with condensed balance sheets and some additional information. The McKenzie Condensed Balance Sheets ibl m noin 20X3 bodn 20X4 December 31, 20X3 and 20X4 0000 $ 6,000 25,500 5,000 325,000 Cash 10,000 26,500 int 10,000 200,000 as (20,000) $226,500 Accounts Receivable Investments Equipment Accumulated Depreciation (40,000) $321,500 Ma Total Assets GO0.08 Current Liabilities: l$ 18,000 5,000 5,000 Accounts Payable Mortgage Payable (Current) Dividends Payable $21,000 5,000 5,000 Noncurrent Liabilities: Mortgage Payable Notes Payable 75,000 70,000 40,000 Common Stock 00.01 Retained Earnings0 Total Liabilities and Owners' Equity 50,000 100,000 73,500 80,500 $226,500 $321,500 Additional information for 20X4: 1. Equipment that cost $20,000 depreciated to its salvage value of $2,000 and was sold for $8,000. 2. Common stock, purchased as a long-term investment for $5,000, was sold for $15,000. 3. Dividends declared totaled $15,000. up 4. Equipment was purchased for $145,000. 5. Depreciation expense totaled $38,000. Long-term debt of $5,000 was reclassified as current and $5,000 of long-term debt was dod isa all 00022 6. 7. Common stock of $50,000 was sold and long-term debt of $40,000 (note payable) was borrowed. 8. The McKenzie generated net income of $22,000. Required: Prepare the SCF as requested by Ms. McKenzie using the indirect method. o Iatste s 9 Challenge Problems Problem 15
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
My text book is Hospitality Industry Financial Accounting (4th edition). I am in chapter 17 -- Statement of
Problem 14 asks me to prepare the SCF as requested by Ms. McKenzie using the indirect method.
The scenario will be show inthe image.
Transcribed Image Text:0008
Problem 14
The operations of The McKenzie, a small lodging operation, are becoming more complex.
Ms. Jo McKenzie, the owner, has asked for your help in preparing her statement of cash
flows. She is able to present you with condensed balance sheets and some additional
information.
The McKenzie
Condensed Balance Sheets
ibl
m
noin 20X3 bodn 20X4
December 31, 20X3 and 20X4
0000
$ 6,000
25,500
5,000
325,000
Cash
10,000
26,500 int
10,000
200,000 as
(20,000)
$226,500
Accounts Receivable
Investments
Equipment
Accumulated Depreciation
(40,000)
$321,500
Ma
Total Assets
GO0.08
Current Liabilities:
l$ 18,000
5,000
5,000
Accounts Payable
Mortgage Payable (Current)
Dividends Payable
$21,000
5,000
5,000
Noncurrent Liabilities:
Mortgage Payable
Notes Payable
75,000
70,000
40,000
Common Stock 00.01
Retained Earnings0
Total Liabilities and
Owners' Equity
50,000
100,000
73,500
80,500
$226,500
$321,500
Additional information for 20X4:
1. Equipment that cost $20,000 depreciated to its salvage value of $2,000 and was sold for
$8,000.
2. Common stock, purchased as a long-term investment for $5,000, was sold for $15,000.
3. Dividends declared totaled $15,000.
up
4. Equipment was purchased for $145,000.
5. Depreciation expense totaled $38,000.
Long-term debt of $5,000 was reclassified as current and $5,000 of long-term debt was
dod isa all 00022
6.
7. Common stock of $50,000 was sold and long-term debt of $40,000 (note payable) was
borrowed.
8. The McKenzie generated net income of $22,000.
Required:
Prepare the SCF as requested by Ms. McKenzie using the indirect method.
o Iatste s 9
Challenge Problems
Problem 15
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