Determining Operating Cash Flows-Direct Method Adjusted trial balances for Garboz Company, an industrial recycler, at December 31 of the current and prior year follow. Debits, December 31 Current Year Prior Year Cash $14,000 $12,800 Accounts receivable 13,200 12,000 Inventory 12,400 18,800 Property, plant, and equipment 40,000 38,000 Discount on bonds payable 1,800 2,000 Cost of goods sold 100,000 152,000 Selling expenses 56,600 68,800 General and administrative expenses 54,800 60,520 Interest expense 1,720 1,040 Income tax expense 8,160 24,480 Total debits $302,680 $390,440 Credits, December 31 Current Year Prior Year Allowance for doubtful accounts $ 520 $ 440 Accumulated depreciation 6,600 6,000 Trade accounts payable 10,000 7,000 Income taxes payable 8,400 10,840 Deferred income tax liability 2,120 1,840 Callable bonds payable, 8% 18,000 8,000 Common stock 20,000 16,000 Additional paid-in capital 3,640 3,000 Retained earnings 17,880 25,840 Sales Total credits 215,520 311,480 $302,680 $390,440
Determining Operating Cash Flows-Direct Method Adjusted trial balances for Garboz Company, an industrial recycler, at December 31 of the current and prior year follow. Debits, December 31 Current Year Prior Year Cash $14,000 $12,800 Accounts receivable 13,200 12,000 Inventory 12,400 18,800 Property, plant, and equipment 40,000 38,000 Discount on bonds payable 1,800 2,000 Cost of goods sold 100,000 152,000 Selling expenses 56,600 68,800 General and administrative expenses 54,800 60,520 Interest expense 1,720 1,040 Income tax expense 8,160 24,480 Total debits $302,680 $390,440 Credits, December 31 Current Year Prior Year Allowance for doubtful accounts $ 520 $ 440 Accumulated depreciation 6,600 6,000 Trade accounts payable 10,000 7,000 Income taxes payable 8,400 10,840 Deferred income tax liability 2,120 1,840 Callable bonds payable, 8% 18,000 8,000 Common stock 20,000 16,000 Additional paid-in capital 3,640 3,000 Retained earnings 17,880 25,840 Sales Total credits 215,520 311,480 $302,680 $390,440
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Question
Transcribed Image Text:Determining Operating Cash Flows-Direct Method
Adjusted trial balances for Garboz Company, an industrial recycler, at December 31 of the current and prior year follow.
Debits, December 31
Current Year Prior Year
Cash
$14,000
$12,800
Accounts receivable
13,200
12,000
Inventory
12,400
18,800
Property, plant, and equipment
40,000
38,000
Discount on bonds payable
1,800
2,000
Cost of goods sold
100,000
152,000
Selling expenses
56,600
68,800
General and administrative expenses
54,800
60,520
Interest expense
1,720
1,040
Income tax expense
8,160
24,480
Total debits
$302,680 $390,440
Credits, December 31
Current Year Prior Year
Allowance for doubtful accounts
$ 520
$ 440
Accumulated depreciation
6,600
6,000
Trade accounts payable
10,000
7,000
Income taxes payable
8,400
10,840
Deferred income tax liability
2,120
1,840
Callable bonds payable, 8%
18,000
8,000
Common stock
20,000
16,000
Additional paid-in capital
3,640
3,000
Retained earnings
17,880
25,840
Sales
Total credits
215,520 311,480
$302,680 $390,440
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