Oriole Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Oriole as of May 31, 2020, are as follows. The company is preparing its statement of cash flows. ORIOLE COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31 2020 2019 Current assets Cash $28,300 $20,100 Accounts receivable 74,800 57,600 Inventory 219,200 249,500 Prepaid expenses 8,900 7,100 Total current assets 331,200 334,300 Plant assets Plant assets 596,000 505,100 Less: Accumulated depreciation—plant assets 150,400 124,300 Net plant assets 445,600 380,800 Total assets $776,800 $715,100 Current liabilities Accounts payable $122,200 $114,700 Salaries and wages payable 47,700 72,100 Interest payable 26,700 24,700 Total current liabilities 196,600 211,500 Long-term debt Bonds payable 70,000 100,000 Total liabilities 266,600 311,500 Stockholders’ equity Common stock, $10 par 370,000 280,000 Retained earnings 140,200 123,600 Total stockholders’ equity 510,200 403,600 Total liabilities and stockholders’ equity $776,800 $715,100 ORIOLE COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2020 Sales revenue $1,255,000 Cost of goods sold 715,500 Gross profit 539,500 Expenses Salaries and wages expense 251,700 Interest expense 74,300 Depreciation expense 26,100 Other expenses 8,100 Total expenses 360,200 Operating income 179,300 Income tax expense 43,200 Net income $136,100 The following is additional information concerning Oriole’s transactions during the year ended May 31, 2020. 1. All sales during the year were made on account. 2. All merchandise was purchased on account, comprising the total accounts payable account. 3. Plant assets costing $90,900 were purchased by paying $21,900 in cash and issuing 6,900 shares of stock. 4. The “other expenses” are related to prepaid items. 5. All income taxes incurred during the year were paid during the year. 6. In order to supplement its cash, Oriole issued 2,100 shares of common stock at par value. 7. Cash dividends of $119,500 were declared and paid at the end of the fiscal year.

Oriole Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Oriole as of May 31, 2020, are as follows. The company is preparing its statement of cash flows. ORIOLE COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31 2020 2019 Current assets Cash $28,300 $20,100 Accounts receivable 74,800 57,600 Inventory 219,200 249,500 Prepaid expenses 8,900 7,100 Total current assets 331,200 334,300 Plant assets Plant assets 596,000 505,100 Less: Accumulated depreciation—plant assets 150,400 124,300 Net plant assets 445,600 380,800 Total assets $776,800 $715,100 Current liabilities Accounts payable $122,200 $114,700 Salaries and wages payable 47,700 72,100 Interest payable 26,700 24,700 Total current liabilities 196,600 211,500 Long-term debt Bonds payable 70,000 100,000 Total liabilities 266,600 311,500 Stockholders’ equity Common stock, $10 par 370,000 280,000 Retained earnings 140,200 123,600 Total stockholders’ equity 510,200 403,600 Total liabilities and stockholders’ equity $776,800 $715,100 ORIOLE COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2020 Sales revenue $1,255,000 Cost of goods sold 715,500 Gross profit 539,500 Expenses Salaries and wages expense 251,700 Interest expense 74,300 Depreciation expense 26,100 Other expenses 8,100 Total expenses 360,200 Operating income 179,300 Income tax expense 43,200 Net income $136,100 The following is additional information concerning Oriole’s transactions during the year ended May 31, 2020. 1. All sales during the year were made on account. 2. All merchandise was purchased on account, comprising the total accounts payable account. 3. Plant assets costing $90,900 were purchased by paying $21,900 in cash and issuing 6,900 shares of stock. 4. The “other expenses” are related to prepaid items. 5. All income taxes incurred during the year were paid during the year. 6. In order to supplement its cash, Oriole issued 2,100 shares of common stock at par value. 7. Cash dividends of $119,500 were declared and paid at the end of the fiscal year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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ORIOLE COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31
	2020	2019
Current assets
Cash	$28,300	$20,100
Accounts receivable	74,800	57,600
Inventory	219,200	249,500
Prepaid expenses	8,900	7,100
Total current assets	331,200	334,300

Plant assets
Plant assets	596,000	505,100
Less: Accumulated depreciation—plant assets	150,400	124,300
Net plant assets	445,600	380,800
Total assets	$776,800	$715,100

Current liabilities
Accounts payable	$122,200	$114,700
Salaries and wages payable	47,700	72,100
Interest payable	26,700	24,700
Total current liabilities	196,600	211,500

Long-term debt
Bonds payable	70,000	100,000
Total liabilities	266,600	311,500

Stockholders’ equity
Common stock, $10 par	370,000	280,000
Retained earnings	140,200	123,600
Total stockholders’ equity	510,200	403,600
Total liabilities and stockholders’ equity	$776,800	$715,100

ORIOLE COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2020
Sales revenue		$1,255,000
Cost of goods sold		715,500
Gross profit		539,500

Expenses
Salaries and wages expense		251,700
Interest expense		74,300
Depreciation expense		26,100
Other expenses		8,100
Total expenses		360,200
Operating income		179,300
Income tax expense		43,200
Net income		$136,100

The following is additional information concerning Oriole’s transactions during the year ended May 31, 2020.

1.		All sales during the year were made on account.
2.		All merchandise was purchased on account, comprising the total accounts payable account.
3.		Plant assets costing $90,900 were purchased by paying $21,900 in cash and issuing 6,900 shares of stock.
4.		The “other expenses” are related to prepaid items.
5.		All income taxes incurred during the year were paid during the year.
6.		In order to supplement its cash, Oriole issued 2,100 shares of common stock at par value.
7.		Cash dividends of $119,500 were declared and paid at the end of the fiscal year.

(b)

Prepare a statement of cash flows for Oriole Company for the year ended May 31, 2020, using the direct method. (A reconciliation of net income to net cash provided is not required.) (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

ORIOLE COMPANY Statement of Cash Flows (Partial)

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