Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash 3 6 Accounts receivable Inventory Total current assets 22 24 se 48 75 70 Property, plant, and equipment Less accurulated depreciation 240 2ee 65 5e Net property, plant, and equipnent 175 150 Tatal assets $ 250 $ 220 Liabilities and Stockholders' Equity Accounts payable $ 40 $ 36 Conmon stock 150 145 Retained carnings 39 Total liabilities and stockholders' equity $ 250 $ 220 For this year, the company reported net income as follows: Sales $ 275 Cost of goods sold Gross nargin Selling and adrinistrative expenses 150 125 98 Net incone $ 35 This year Carmono declared and paid a cash dividend. There were no sales of property, plant, and equipment during this year. The company did not repurchase any of its own stock this year. Required: Using the direct method, convert the company's income statement to a cash besis. (Adjustment amounts that are to be deducted should be Indicated with a minus sign.)
Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash 3 6 Accounts receivable Inventory Total current assets 22 24 se 48 75 70 Property, plant, and equipment Less accurulated depreciation 240 2ee 65 5e Net property, plant, and equipnent 175 150 Tatal assets $ 250 $ 220 Liabilities and Stockholders' Equity Accounts payable $ 40 $ 36 Conmon stock 150 145 Retained carnings 39 Total liabilities and stockholders' equity $ 250 $ 220 For this year, the company reported net income as follows: Sales $ 275 Cost of goods sold Gross nargin Selling and adrinistrative expenses 150 125 98 Net incone $ 35 This year Carmono declared and paid a cash dividend. There were no sales of property, plant, and equipment during this year. The company did not repurchase any of its own stock this year. Required: Using the direct method, convert the company's income statement to a cash besis. (Adjustment amounts that are to be deducted should be Indicated with a minus sign.)
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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
Transcribed Image Text:Comparative financial statement data for Carmono Company follow:
This Year
Last Year
Assets
$ 6
Cash
Accounts receivable
3
22
24
Inventory
Total current assets
Property, plant, and equipment
Less accunulated depreciation
Net property, plant, and equipnent
5e
40
75
70
240
2ee
65
se
175
150
Tatal assets
$ 250
$ 220
Liabilities and Stockholders' Equity
Accounts payable
Conmon stock
Retained earnings
$ 40
$ 36
150
145
39
Total liabilities and stockholders' equity
$ 250
$ 220
For this year, the company reported net income as follows:
Sales
Cost of goods sold
Gross nargin
Selling and adrinistrative expenses
$ 275
150
125
90
Net incone
$ 35
This year Cormono declared and paid a cash dividend. There were no sales of property, plant, and equipment during this year. The
company did not repurchase any of its own stock this year.
Required:
Using the direct method, convert the company's income statement to a cash basis. (Adjustment amounts that are to be deducted
should be Indicated with a mlnus sign.)
Carmono Company
Direct Method of Determining the Net Cash flows from Operating activitles
Sales
275
Adjustments to a cash basis:
Decrease in accounts receivable
2
277
Cast af goods sold
150
Adjustments to a cash basis:
Increase in accounts payable
(4)
Increase in inventory
10
156
Selling and administrative expenses
90
Adjustments to a cash basis:
90
31
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