Answered: Instructions Prepare a statement of…

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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Condensed fi nancial data of Minnie Hooper Company are shown below. MINNIE HOOPER COMPANY Comparative Balance Sheets December 31 Assets 2012 2011 Cash $102,700 $ 33,400 Accounts receivable 60,800 37,000 Inventory 126,900 102,650 Investments 79,500 107,000 Plant assets 315,000 205,000 Accumulated depreciation (44,500) (40,000) Total $640,400 $445,050 Liabilities and Stockholders’ Equity Accounts payable $ 57,700 $ 48,280 Accrued expenses payable 15,100 18,830 Bonds payable 145,000 70,000 Common stock 250,000 200,000 Retained earnings 172,600 107,940 Total $640,400 $445,050 MINNIE HOOPER COMPANY Income Statement For the Year Ended December 31, 2012 Sales revenue $297,500 Gain on sale of plant assets 5,000 302,500 Less: Cost of goods sold $99,460 Operating expenses, excluding depreciation expense 19,670 Depreciation expense 30,500 Income taxes 37,270 Interest expense 2,940 189,840 Net income $112,660 Additional information: 1. New plant assets costing $146,000 were purchased for cash during the year. 2. Investments were sold at cost. 3. Plant assets costing $36,000 were sold for $15,000, resulting in a gain of $5,000. 4. A cash dividend of $48,000 was declared and paid during the year. Instructions Prepare a statement of cash fl ows using the indirect method

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