Presented below are the financial statements of Swifty Corporation. Swifty Corporation Comparative Balance Sheets December 31 Assets 2022 2021 Cash $ 28,000 $ 16,000 Accounts receivable 16,000 11,200 Inventory 22,400 16,000 Property, plant, and equipment 48,000 62,400 Accumulated depreciation (25,600 ) (19,200 ) Total $88,800 $86,400 Liabilities and Stockholders’ Equity Accounts payable $ 15,200 $ 12,000 Income taxes payable 5,600 6,400 Bonds payable 13,600 26,400 Common stock 14,400 11,200 Retained earnings 40,000 30,400 Total $88,800 $86,400 Swifty Corporation Income Statement For the Year Ended December 31, 2022 Sales revenue $193,600 Cost of goods sold 140,000 Gross profit 53,600 Selling expenses $14,400 Administrative expenses 4,800 19,200 Income from operations 34,400 Interest expense 2,400 Income before income taxes 32,000 Income tax expense 6,400 Net income $ 25,600 Additional data: 1. Depreciation expense was $14,000. 2. Dividends declared and paid were $16,000. 3. During the year equipment was sold for $6,800 cash. This equipment cost $14,400 originally and had accumulated depreciation of $7,600 at the time of sale. Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Swifty Corporation Statement of Cash Flows Choose the accounting period Select an opening name for section one Select an item $Enter a dollar amount Adjustments to reconcile net income to Select an opening subsection name Select an item $Enter a dollar amount Select an item Enter a dollar amount Select an item Enter a dollar amount Select an item Enter a dollar amount Select an item Enter a dollar amount Enter a total amount for this subsection Select a closing name for section one Enter a total amount for section one Select an opening name for section two Select an item Enter a dollar amount Select an opening name for section three Select an item Enter a dollar amount Select an item Enter a dollar amount Select an item Enter a dollar amount Select a closing name for section three Enter a total amount for section three Select an item Enter a total amount for three sections Select an item Enter a dollar amount Select a closing name for this statement $Enter a total of the two previous amounts eTextbook and Media Compute free cash flow. (Show a negative free cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) Free cash flow $Enter free cash flow in dollars
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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Swifty Corporation
Comparative Balance Sheets December 31 |
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Assets
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2022
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2021
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Cash
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$ 28,000
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$ 16,000
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16,000
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11,200
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Inventory
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22,400
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16,000
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Property, plant, and equipment
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48,000
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62,400
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(25,600
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)
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(19,200
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)
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Total
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$88,800
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$86,400
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Liabilities and
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Accounts payable
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$ 15,200
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$ 12,000
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Income taxes payable
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5,600
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6,400
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Bonds payable
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13,600
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26,400
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Common stock
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14,400
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11,200
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40,000
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30,400
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Total
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$88,800
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$86,400
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Swifty Corporation
Income Statement For the Year Ended December 31, 2022 |
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Sales revenue
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$193,600
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Cost of goods sold
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140,000
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Gross profit
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53,600
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Selling expenses
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$14,400
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Administrative expenses
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4,800
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19,200
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Income from operations
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34,400
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Interest expense
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2,400
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Income before income taxes
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32,000
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Income tax expense
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6,400
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Net income
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$ 25,600
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Additional data:
| 1. | Depreciation expense was $14,000. | |
| 2. | Dividends declared and paid were $16,000. | |
| 3. | During the year equipment was sold for $6,800 cash. This equipment cost $14,400 originally and had accumulated depreciation of $7,600 at the time of sale. |
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Swifty Corporation
Statement of Cash Flows Choose the accounting period |
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Select an opening name for section one
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Select an item
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$Enter a dollar amount
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Adjustments to reconcile net income to
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$Enter a dollar amount
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Select an item
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Enter a dollar amount
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Select an item
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Enter a dollar amount
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Select an item
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Enter a total amount for this subsection
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Select a closing name for section one
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Enter a total amount for section one
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Select an opening name for section two
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Select an item
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Enter a dollar amount
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Select an opening name for section three
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Select an item
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Enter a dollar amount
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Select an item
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Enter a dollar amount
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Select an item
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Enter a dollar amount
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Select a closing name for section three
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Enter a total amount for section three
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Select an item
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Enter a total amount for three sections
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Select an item
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Enter a dollar amount
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Select a closing name for this statement
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$Enter a total of the two previous amounts
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eTextbook and Media
| Free cash flow |
$Enter free cash flow in dollars
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