Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $3 $ 6 Accounts receivable 22 24 Inventory 50 40 Total current assets 75 70 240 200 65 50 Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Total assets 175 150 $ 250 $ 220 Liabilities and Stockholders' Equity Accounts payable Common stock $ 40 $36 150 145 Retained earnings 60 39 Total liabilities and stockholders' equity $ 250 $ 220 For this year, the company reported net income as follows: Sales $ 275 Cost of goods sold 150 Gross margin 125 Selling and administrative expenses 90 Net income $ 35 This year Carmono declared and paid a cash dividend. There were no sales of property, plant, and equip 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 amount should be indicated with a minus sign.)

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
icon
Concept explainers
Topic Video
Question
Comparative financial statement data for Carmono Company follow:
This Year Last Year
Assets
Cash
$3
$ 6
Accounts receivable
22
24
Inventory
50
40
Total current assets
75
70
240
200
65
50
Property, plant, and equipment
Less accumulated depreciation
Net property, plant, and equipment
Total assets
175
150
$ 250
$ 220
Liabilities and Stockholders' Equity
Accounts payable
$ 40
$36
Common stock
150
145
Retained earnings
60
39
Total liabilities and stockholders' equity
$ 250
$ 220
For this year, the company reported net income as follows:
Sales
Cost of goods sold.
Gross margin
Selling and administrative expenses
Net income
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 basis. (Adjustment amounts that are to be deducted
should be indicated with a minus sign.)
$275
22|35|2|
150
125
$35
Transcribed Image Text:Comparative financial statement data for Carmono Company follow: This Year Last Year Assets Cash $3 $ 6 Accounts receivable 22 24 Inventory 50 40 Total current assets 75 70 240 200 65 50 Property, plant, and equipment Less accumulated depreciation Net property, plant, and equipment Total assets 175 150 $ 250 $ 220 Liabilities and Stockholders' Equity Accounts payable $ 40 $36 Common stock 150 145 Retained earnings 60 39 Total liabilities and stockholders' equity $ 250 $ 220 For this year, the company reported net income as follows: Sales Cost of goods sold. Gross margin Selling and administrative expenses Net income 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 basis. (Adjustment amounts that are to be deducted should be indicated with a minus sign.) $275 22|35|2| 150 125 $35
Carmono Company
Direct Method of Determining the Net Cash flows from Operating activities
Adjustments to a cash basis:
0
Adjustments to a cash basis:
0
Selling and administrative expenses
Adjustments to a cash basis:
GA
$
$
0
0
Transcribed Image Text:Carmono Company Direct Method of Determining the Net Cash flows from Operating activities Adjustments to a cash basis: 0 Adjustments to a cash basis: 0 Selling and administrative expenses Adjustments to a cash basis: GA $ $ 0 0
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 2 steps

Blurred answer
Knowledge Booster
Financial Statements
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education