Condensed financial data of Whispering Winds Corp. follow. Whispering Winds Corp. Comparative Balance Sheets December 31 Assets 2022 2021 Cash $ 72,720 $ 43,560 Accounts receivable 79,020 34,200 Inventory 101,250 92,565 Prepaid expenses 25,560 23,400 Long-term investments 124,200 98,100 Plant assets 256,500 218,250 Accumulated depreciation (45,000 ) (46,800 ) Total $614,250 $463,275 Liabilities and Stockholders’ Equity Accounts payable $ 91,800 $ 60,570 Accrued expenses payable 14,850 18,900 Bonds payable 99,000 131,400 Common stock 198,000 157,500 Retained earnings 210,600 94,905 Total $614,250 $463,275 Whispering Winds Corp. Income Statement Data For the Year Ended December 31, 2022 Sales revenue $349,614 Less: Cost of goods sold $121,914 Operating expenses, excluding depreciation 11,169 Depreciation expense 41,850 Income tax expense 24,552 Interest expense 4,257 Loss on disposal of plant assets 6,750 210,492 Net income $ 139,122 Additional information: 1. New plant assets costing $90,000 were purchased for cash during the year. 2. Old plant assets having an original cost of $51,750 and accumulated depreciation of $43,650 were sold for $1,350 cash. 3. Bonds payable matured and were paid off at face value for cash. 4. A cash dividend of $23,427 was declared and paid during the year. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Whispering Winds Corp. Statement of Cash Flows choose the accounting period December 31, 2022For the Year Ended December 31, 2022For the Quarter Ended December 31, 2022 select an opening name for section one Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash select an item Decrease in Accounts PayableDecrease in Accounts ReceivableDecrease in Accrued Expenses PayableDecrease in InventoryDecrease in Prepaid ExpensesDepreciation ExpenseIncrease in Accounts PayableIncrease in Accounts ReceivableIncrease in Accrued Expenses PayableIncrease in InventoryIncrease in Prepaid ExpensesGain on Disposal of Plant AssetsLoss on Disposal of Plant AssetsNet IncomePayment of Cash DividendsPurchase of InvestmentsPurchase of Plant AssetsRedemption of BondsSale of Common StockSale of Plant Assets $enter a dollar amount Adjustments to reconcile net income to select an opening name for subsection Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash select an item $enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount enter a total amount for this subsection select a closing name for section one enter a total amount for section one select an opening name for section two select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select a closing name for section two enter a total amount for section two select an opening name for section three select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select a closing name for section three enter a total amount for section three select an item enter a total amount for three sections select an item enter a dollar amount select a closing name for this statement $enter a total of the two previous amounts
Condensed financial data of Whispering Winds Corp. follow. Whispering Winds Corp. Comparative Balance Sheets December 31 Assets 2022 2021 Cash $ 72,720 $ 43,560 Accounts receivable 79,020 34,200 Inventory 101,250 92,565 Prepaid expenses 25,560 23,400 Long-term investments 124,200 98,100 Plant assets 256,500 218,250 Accumulated depreciation (45,000 ) (46,800 ) Total $614,250 $463,275 Liabilities and Stockholders’ Equity Accounts payable $ 91,800 $ 60,570 Accrued expenses payable 14,850 18,900 Bonds payable 99,000 131,400 Common stock 198,000 157,500 Retained earnings 210,600 94,905 Total $614,250 $463,275 Whispering Winds Corp. Income Statement Data For the Year Ended December 31, 2022 Sales revenue $349,614 Less: Cost of goods sold $121,914 Operating expenses, excluding depreciation 11,169 Depreciation expense 41,850 Income tax expense 24,552 Interest expense 4,257 Loss on disposal of plant assets 6,750 210,492 Net income $ 139,122 Additional information: 1. New plant assets costing $90,000 were purchased for cash during the year. 2. Old plant assets having an original cost of $51,750 and accumulated depreciation of $43,650 were sold for $1,350 cash. 3. Bonds payable matured and were paid off at face value for cash. 4. A cash dividend of $23,427 was declared and paid during the year. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Whispering Winds Corp. Statement of Cash Flows choose the accounting period December 31, 2022For the Year Ended December 31, 2022For the Quarter Ended December 31, 2022 select an opening name for section one Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash select an item Decrease in Accounts PayableDecrease in Accounts ReceivableDecrease in Accrued Expenses PayableDecrease in InventoryDecrease in Prepaid ExpensesDepreciation ExpenseIncrease in Accounts PayableIncrease in Accounts ReceivableIncrease in Accrued Expenses PayableIncrease in InventoryIncrease in Prepaid ExpensesGain on Disposal of Plant AssetsLoss on Disposal of Plant AssetsNet IncomePayment of Cash DividendsPurchase of InvestmentsPurchase of Plant AssetsRedemption of BondsSale of Common StockSale of Plant Assets $enter a dollar amount Adjustments to reconcile net income to select an opening name for subsection Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash select an item $enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount enter a total amount for this subsection select a closing name for section one enter a total amount for section one select an opening name for section two select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select a closing name for section two enter a total amount for section two select an opening name for section three select an item enter a dollar amount select an item enter a dollar amount select an item enter a dollar amount select a closing name for section three enter a total amount for section three select an item enter a total amount for three sections select an item enter a dollar amount select a closing name for this statement $enter a total of the two previous amounts
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Concept explainers
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
Topic Video
Question
Condensed financial data of Whispering Winds Corp. follow.
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Whispering Winds Corp.
Comparative Balance Sheets December 31 |
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|---|---|---|---|---|---|---|
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Assets
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2022
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2021
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Cash
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$ 72,720
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$ 43,560
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79,020
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34,200
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Inventory
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101,250
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92,565
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Prepaid expenses
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25,560
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23,400
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Long-term investments
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124,200
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98,100
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Plant assets
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256,500
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218,250
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(45,000
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)
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(46,800
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)
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Total
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$614,250
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$463,275
|
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Liabilities and
|
||||||
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Accounts payable
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$ 91,800
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$ 60,570
|
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Accrued expenses payable
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14,850
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18,900
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Bonds payable
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99,000
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131,400
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Common stock
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198,000
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157,500
|
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|
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210,600
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94,905
|
||||
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Total
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$614,250
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$463,275
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Whispering Winds Corp.
Income Statement Data For the Year Ended December 31, 2022 |
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|---|---|---|---|---|
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Sales revenue
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$349,614
|
|||
|
Less:
|
||||
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Cost of goods sold
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$121,914
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Operating expenses, excluding depreciation
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11,169
|
|||
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Depreciation expense
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41,850
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Income tax expense
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24,552
|
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Interest expense
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4,257
|
|||
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Loss on disposal of plant assets
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6,750
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210,492
|
||
|
Net income
|
$ 139,122
|
Additional information:
| 1. | New plant assets costing $90,000 were purchased for cash during the year. | |
| 2. | Old plant assets having an original cost of $51,750 and accumulated depreciation of $43,650 were sold for $1,350 cash. | |
| 3. | Bonds payable matured and were paid off at face value for cash. | |
| 4. | A cash dividend of $23,427 was declared and paid during the year. |
Prepare a statement of
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Whispering Winds Corp.
Statement of Cash Flows choose the accounting period December 31, 2022For the Year Ended December 31, 2022For the Quarter Ended December 31, 2022 |
||
|---|---|---|
|
select an opening name for section one Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
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||
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select an item Decrease in Accounts PayableDecrease in Accounts ReceivableDecrease in Accrued Expenses PayableDecrease in InventoryDecrease in Prepaid ExpensesDepreciation ExpenseIncrease in Accounts PayableIncrease in Accounts ReceivableIncrease in Accrued Expenses PayableIncrease in InventoryIncrease in Prepaid ExpensesGain on Disposal of Plant AssetsLoss on Disposal of Plant AssetsNet IncomePayment of Cash DividendsPurchase of InvestmentsPurchase of Plant AssetsRedemption of BondsSale of Common StockSale of Plant Assets
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$enter a dollar amount
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Adjustments to reconcile net income to
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select an opening name for subsection Cash at Beginning of PeriodCash at End of PeriodCash Flows from Financing ActivitiesCash Flows from Investing ActivitiesCash Flows from Operating ActivitiesNet Cash Provided by Financing ActivitiesNet Cash Provided by Investing ActivitiesNet Cash Provided by Operating ActivitiesNet Cash used by Financing ActivitiesNet Cash used by Investing ActivitiesNet Cash used by Operating ActivitiesNet Decrease in CashNet Increase in Cash
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select an item
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$enter a dollar amount
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select an item
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enter a dollar amount
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select an item
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enter a dollar amount | |
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select an item
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enter a dollar amount
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select an item
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enter a dollar amount
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select an item
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enter a dollar amount
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select an item
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enter a dollar amount
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enter a total amount for this subsection
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select a closing name for section one
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enter a total amount for section one
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select an opening name for section two
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||
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select an item
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enter a dollar amount
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select an item
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enter a dollar amount
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|
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select an item
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enter a dollar amount
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select a closing name for section two
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enter a total amount for section two
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|
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select an opening name for section three
|
||
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select an item
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enter a dollar amount
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|
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select an item
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enter a dollar amount
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select an item
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enter a dollar amount
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select a closing name for section three
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enter a total amount for section three
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|
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select an item
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enter a total amount for three sections
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select an item
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enter a dollar amount
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select a closing name for this statement
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$enter a total of the two previous amounts
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