create a statement of cash flows with the given information: Scruggs, Inc. Balance Sheet December 31, 2017 2016 Cash $17,000 $12,000 Account receivable 60,000 40,000 Inventory 84,000 70,000 Prepaid expenses 6,000 4,000 Property, Plant & Equipment 250,000 210,000 Accumulated depreciation (60,000) (48,000) $357,000 $288,000 Accounts payable $35,000 $40,000 Interest payable 3,000 4,000 Income taxes payable 22,000 12,000 Bonds payable (due in 2020) 90,000 64,000 Common Stock $5 par 95,000 80,000 Retained Earnings 112,000 88,000 $357,000 $288,000 Scruggs, Inc. Income Statement For Year Ended December 31, 2017 Net sales $590,000 Cost of goods sold 300,000 Gross profit 290,000 Depreciation expense 24,000 Other operating expenses 216,000 Loss on sale of equipment 6,000 Interest expense 7,000 Income tax expense 15,000 Total expenses 268,000 Gain on retirement of bonds 16,000 Net income $38,000 Additional Information a. Plant assets that cost $70,000 were purchased by paying $10,000 cash and issuing $60,000 of bonds payable. b. Plant assets with an original cost of $30,000 and accumulated depreciation of $12,000 were sold c. Bonds were retired by paying $18,000 cash. d. Common stock was sold for $15,000 cash. Prepare a complete cash flow statement using the indirect and direct methods.

create a statement of cash flows with the given information: Scruggs, Inc. Balance Sheet December 31, 2017 2016 Cash $17,000 $12,000 Account receivable 60,000 40,000 Inventory 84,000 70,000 Prepaid expenses 6,000 4,000 Property, Plant & Equipment 250,000 210,000 Accumulated depreciation (60,000) (48,000) $357,000 $288,000 Accounts payable $35,000 $40,000 Interest payable 3,000 4,000 Income taxes payable 22,000 12,000 Bonds payable (due in 2020) 90,000 64,000 Common Stock $5 par 95,000 80,000 Retained Earnings 112,000 88,000 $357,000 $288,000 Scruggs, Inc. Income Statement For Year Ended December 31, 2017 Net sales $590,000 Cost of goods sold 300,000 Gross profit 290,000 Depreciation expense 24,000 Other operating expenses 216,000 Loss on sale of equipment 6,000 Interest expense 7,000 Income tax expense 15,000 Total expenses 268,000 Gain on retirement of bonds 16,000 Net income $38,000 Additional Information a. Plant assets that cost $70,000 were purchased by paying $10,000 cash and issuing $60,000 of bonds payable. b. Plant assets with an original cost of $30,000 and accumulated depreciation of $12,000 were sold c. Bonds were retired by paying $18,000 cash. d. Common stock was sold for $15,000 cash. Prepare a complete cash flow statement using the indirect and direct methods.

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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create a statement of cash flows with the given information:

Scruggs, Inc.
Balance Sheet
December 31,

			2017		2016
Cash			$17,000		$12,000
Account receivable		60,000		40,000
Inventory		84,000		70,000
Prepaid expenses		6,000		4,000
Property, Plant & Equipment	250,000		210,000
Accumulated depreciation	(60,000)		(48,000)
			$357,000		$288,000

Accounts payable		$35,000		$40,000
Interest payable		3,000		4,000
Income taxes payable	22,000		12,000
Bonds payable (due in 2020)	90,000		64,000
Common Stock $5 par	95,000		80,000
Retained Earnings		112,000		88,000
			$357,000		$288,000



Scruggs, Inc.
Income Statement
For Year Ended December 31, 2017



Net sales			$590,000
Cost of goods sold		300,000
Gross profit		290,000

Depreciation expense	24,000
Other operating expenses	216,000
Loss on sale of equipment	6,000
Interest expense		7,000
Income tax expense	15,000
Total expenses		268,000

Gain on retirement of bonds	16,000

Net income		$38,000

Additional Information
a.	Plant assets that cost $70,000 were purchased by paying
	$10,000 cash and issuing $60,000 of bonds payable.

b.	Plant assets with an original cost of $30,000 and accumulated
	depreciation of $12,000 were sold

c.	Bonds were retired by paying $18,000 cash.

d.	Common stock was sold for $15,000 cash.
Prepare a complete cash flow statement using the indirect and direct methods.

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