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repare a statement of cash flows using the indirect method. ote: Amounts to be deducted and cash outflows should be india

repare a statement of cash flows using the indirect method. ote: Amounts to be deducted and cash outflows should be india

FINANCIAL ACCOUNTING
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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The comparative balance sheets and income statements for Gypsy Company follow: Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment Land Total assets Balance Sheets As of December 31 Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and equity Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income $61,200 (24,500) 36,700 (12,000) 24,700 1,500 (100) $26,100 Year 2 $32,500 4,750 11,200 45,000 (17,800) 28,000 $103,650 $3,750 5,800 47,000 47,100 $103,650 Year 1 $16,300 2,800 9,800 52,000 (21,800) 12,000 $71,100 $4,900 7,800 25,000 33,400 $71,100
Transcribed Image Text:The comparative balance sheets and income statements for Gypsy Company follow: Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment Land Total assets Balance Sheets As of December 31 Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and equity Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income $61,200 (24,500) 36,700 (12,000) 24,700 1,500 (100) $26,100 Year 2 $32,500 4,750 11,200 45,000 (17,800) 28,000 $103,650 $3,750 5,800 47,000 47,100 $103,650 Year 1 $16,300 2,800 9,800 52,000 (21,800) 12,000 $71,100 $4,900 7,800 25,000 33,400 $71,100
Additional Data 1. During Year 2, the company sold equipment for $21,500; it had originally cost $36,000. Accumulated depreciation on this equipment was $16,000 at the time of the sale. Also, the company purchased equipment for $29,000 cash. 2. The company sold land that had cost $6,000. This land was sold for $5,900, resulting in the recognition of a $100 loss. Also, common stock was issued in exchange for title to land that was valued at $22,000 at the time of exchange. 3. Paid dividends of $12,400. Required Prepare a statement of cash flows using the indirect method. Note: Amounts to be deducted and cash outflows should be indicated by a minus sign. GYPSY COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Less: Increase/Decrease in current assets and current liabilities: Plus: Noncash charges Cash flows from investing activities: $ < Prev 0 5 of 5 Next
Transcribed Image Text:Additional Data 1. During Year 2, the company sold equipment for $21,500; it had originally cost $36,000. Accumulated depreciation on this equipment was $16,000 at the time of the sale. Also, the company purchased equipment for $29,000 cash. 2. The company sold land that had cost $6,000. This land was sold for $5,900, resulting in the recognition of a $100 loss. Also, common stock was issued in exchange for title to land that was valued at $22,000 at the time of exchange. 3. Paid dividends of $12,400. Required Prepare a statement of cash flows using the indirect method. Note: Amounts to be deducted and cash outflows should be indicated by a minus sign. GYPSY COMPANY Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from operating activities: Less: Increase/Decrease in current assets and current liabilities: Plus: Noncash charges Cash flows from investing activities: $ < Prev 0 5 of 5 Next
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