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Bought equipment for cash, $65,000. Paid $12,500 on long-term note payable. Issued new shares of common stock for $20,000 cash. Cash dividends of $21,000 were declared and paid to stockholders. Accounts Payable arose from inventory purchases on credit. • Income tax expense ($11,350) and interest expense ($3,750) were paid in full at the end of both years and are included in Other Expenses.

Bought equipment for cash, $65,000. Paid $12,500 on long-term note payable. Issued new shares of common stock for $20,000 cash. Cash dividends of $21,000 were declared and paid to stockholders. Accounts Payable arose from inventory purchases on credit. • Income tax expense ($11,350) and interest expense ($3,750) were paid in full at the end of both years and are included in Other Expenses.

FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The management team of Wickersham Brothers Incorporated is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized. Current Year Prior Year Balance Sheet Assets Cash Accounts Receivable Inventory Property and Equipment Less: Accumulated Depreciation Total assets Liabilities: Accounts Payable Salaries and Wages Payable. Notes Payable, Long-Term Stockholders' Equity: Common Stock Retained Earnings Total Liabilities and Stockholders' equity Income Statement Sales Cost of Goods Sold Depreciation Expense Other Expenses Net Income $ 70,500 100,000 75,000 140,000 (39,600) $ 345,900 $ 12,500 2,500 62,500 120,000 148,400 $ 345,900 $ 300,000 160,000 19,600 75,000 $ 45,400 $ 91,500 87,500 81,250 75,000 (20,000) $ 315,250 $15,000 1,250 75,000 100,000 124,000 $ 315,250 Other information from the company's records includes the following: Bought equipment for cash, $65,000. Paid $12,500 on long-term note payable. • Issued new shares of common stock for $20,000 cash. • Cash dividends of $21,000 were declared and paid to stockholders. • Accounts Payable arose from inventory purchases on credit. • Income tax expense ($11,350) and interest expense ($3,750) were paid in full at the end of both years and are included in Other Expenses. Required: a. Prepare the statement of cash flows using the indirect method. Include any supplemental disclosures. (Enter any deductions and cash outflows as a negative value.)
Transcribed Image Text:The management team of Wickersham Brothers Incorporated is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized. Current Year Prior Year Balance Sheet Assets Cash Accounts Receivable Inventory Property and Equipment Less: Accumulated Depreciation Total assets Liabilities: Accounts Payable Salaries and Wages Payable. Notes Payable, Long-Term Stockholders' Equity: Common Stock Retained Earnings Total Liabilities and Stockholders' equity Income Statement Sales Cost of Goods Sold Depreciation Expense Other Expenses Net Income $ 70,500 100,000 75,000 140,000 (39,600) $ 345,900 $ 12,500 2,500 62,500 120,000 148,400 $ 345,900 $ 300,000 160,000 19,600 75,000 $ 45,400 $ 91,500 87,500 81,250 75,000 (20,000) $ 315,250 $15,000 1,250 75,000 100,000 124,000 $ 315,250 Other information from the company's records includes the following: Bought equipment for cash, $65,000. Paid $12,500 on long-term note payable. • Issued new shares of common stock for $20,000 cash. • Cash dividends of $21,000 were declared and paid to stockholders. • Accounts Payable arose from inventory purchases on credit. • Income tax expense ($11,350) and interest expense ($3,750) were paid in full at the end of both years and are included in Other Expenses. Required: a. Prepare the statement of cash flows using the indirect method. Include any supplemental disclosures. (Enter any deductions and cash outflows as a negative value.)
WICKERSHAM BROTHERS INCORPORATED Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Adjustments to reconcile net income to net cash provided by operating activities: Changes in current assets and current liabilities: Cash Flows from Investing Activities: Cash Flows from Financing Activities: Cash and Cash Equivalents, beginning of period Cash and Cash Equivalents, end of period Supplemental Disclosures: S $ $ $ 0 0 0 0
Transcribed Image Text:WICKERSHAM BROTHERS INCORPORATED Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Adjustments to reconcile net income to net cash provided by operating activities: Changes in current assets and current liabilities: Cash Flows from Investing Activities: Cash Flows from Financing Activities: Cash and Cash Equivalents, beginning of period Cash and Cash Equivalents, end of period Supplemental Disclosures: S $ $ $ 0 0 0 0
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