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prepare statement of cash flow for indirect only

prepare statement of cash flow for indirect only

Essentials Of Investments
Essentials Of Investments
11th Edition
ISBN:9781260013924
Author:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Publisher:Bodie, Zvi, Kane, Alex, MARCUS, Alan J.
Chapter1: Investments: Background And Issues
Section: Chapter Questions
Problem 1PS
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prepare statement of cash flow for indirect only

**VNN, Inc.** **Comparative Balance Sheet** | | 12/31/22 | 12/31/21 | |---|----------|----------| | **Assets** | | Cash | $96,000 | $38,000 | | Accounts receivable | $18,000 | $22,000 | | Inventory | $10,000 | $12,000 | | Prepaid expenses | $8,000 | $5,000 | | Long-term investments | $0 | $23,000 | | Equipment | $65,000 | $41,000 | | Accumulated depreciation - equipment | ($19,000) | ($14,000) | | **Total assets** | $178,000 | $127,000 | | **Liabilities and Stockholders Equity** | | Accounts payable | $21,000 | $37,000 | | Bonds payable | $45,000 | $40,000 | | Common stock | $35,000 | $23,000 | | Retained earnings | $77,000 | $27,000 | | **Total liabilities and stockholders equity** | $178,000 | $127,000 | **Additional Information:** 1. Net income was $71,000 and $21,000 cash dividends were declared and paid during 2022. 2. Long-term investments that had a cost of $23,000 were sold for $35,000, a gain of $12,000. 3. There were purchases of equipment, but no sales or disposals. --- In this comparative balance sheet, VNN, Inc.'s financial position is reported on two dates: December 31, 2022, and December 31, 2021. This comparison helps to provide insights into changes in the company's financial health over the one-year period. Key metrics to observe include: - Increase in cash and equipment over the year. - Reduction in accounts payable suggesting outgoing payments towards creditors. - Increase in common stock and retained earnings indicating growth in shareholders' equity and profits retained by the company. - Notable transactions and net income which provide context to the figures shown in the balance sheet, with specific mention of dividends paid, investment gains, and equipment purchases. This summary provides an overall snapshot of how assets, liabilities, and stockholders' equity have evolved over the year, reflecting the operational and financial activities of VNN, Inc.
Transcribed Image Text:**VNN, Inc.** **Comparative Balance Sheet** | | 12/31/22 | 12/31/21 | |---|----------|----------| | **Assets** | | Cash | $96,000 | $38,000 | | Accounts receivable | $18,000 | $22,000 | | Inventory | $10,000 | $12,000 | | Prepaid expenses | $8,000 | $5,000 | | Long-term investments | $0 | $23,000 | | Equipment | $65,000 | $41,000 | | Accumulated depreciation - equipment | ($19,000) | ($14,000) | | **Total assets** | $178,000 | $127,000 | | **Liabilities and Stockholders Equity** | | Accounts payable | $21,000 | $37,000 | | Bonds payable | $45,000 | $40,000 | | Common stock | $35,000 | $23,000 | | Retained earnings | $77,000 | $27,000 | | **Total liabilities and stockholders equity** | $178,000 | $127,000 | **Additional Information:** 1. Net income was $71,000 and $21,000 cash dividends were declared and paid during 2022. 2. Long-term investments that had a cost of $23,000 were sold for $35,000, a gain of $12,000. 3. There were purchases of equipment, but no sales or disposals. --- In this comparative balance sheet, VNN, Inc.'s financial position is reported on two dates: December 31, 2022, and December 31, 2021. This comparison helps to provide insights into changes in the company's financial health over the one-year period. Key metrics to observe include: - Increase in cash and equipment over the year. - Reduction in accounts payable suggesting outgoing payments towards creditors. - Increase in common stock and retained earnings indicating growth in shareholders' equity and profits retained by the company. - Notable transactions and net income which provide context to the figures shown in the balance sheet, with specific mention of dividends paid, investment gains, and equipment purchases. This summary provides an overall snapshot of how assets, liabilities, and stockholders' equity have evolved over the year, reflecting the operational and financial activities of VNN, Inc.
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