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Required information [The following information applies to the questions displayed below.] Purple Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. PURPLE COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 145,400 33,750 Depreciation expense other gains (losses). Loss on sale of equipment Income before taxes Income taxes expense Net Income Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets PURPLE COMPANY Comparative Balance Sheets December 31 Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities $ 647,500 298,000 349,500 179,150 (18,125) 152,225 42,450 $ 109,775 Current Year Prior Year $ 69,400 85,400 295, 156 1,340 451,296 144,500 (43,125) $ 552,671 $ 66,141 72,400 138,541 182,250 57,000 174,880 $ 552,671 $86,500 63,625 264,800 2,155 Required: Prepare a complete statement of cash flows using the direct method. Note: Amounts to be deducted should be indicated with a minus sign. 417,080 121,000 (52,500) $ 485,580. Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions a. Sold equipment for cash. b. Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term note for the balance. c. Paid cash to reduce the long-term note. $ 134,175 70,350 204,525 163,250 0 117,805 $ 485,580

Required information [The following information applies to the questions displayed below.] Purple Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. PURPLE COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 145,400 33,750 Depreciation expense other gains (losses). Loss on sale of equipment Income before taxes Income taxes expense Net Income Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets PURPLE COMPANY Comparative Balance Sheets December 31 Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities $ 647,500 298,000 349,500 179,150 (18,125) 152,225 42,450 $ 109,775 Current Year Prior Year $ 69,400 85,400 295, 156 1,340 451,296 144,500 (43,125) $ 552,671 $ 66,141 72,400 138,541 182,250 57,000 174,880 $ 552,671 $86,500 63,625 264,800 2,155 Required: Prepare a complete statement of cash flows using the direct method. Note: Amounts to be deducted should be indicated with a minus sign. 417,080 121,000 (52,500) $ 485,580. Equity Common stock, $5 par value Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions a. Sold equipment for cash. b. Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term note for the balance. c. Paid cash to reduce the long-term note. $ 134,175 70,350 204,525 163,250 0 117,805 $ 485,580

Financial Accounting
Financial Accounting
15th Edition
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Carl Warren, James M. Reeve, Jonathan Duchac
Chapter8: Internal Control And Cash
Section: Chapter Questions
Problem 5PEA: Financial data for Otto Company follow: a. Compute the ratio of cash to monthly cash expenses. b....
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Required information [The following information applies to the questions displayed below.] Purple Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. PURPLE COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 145,400 33,750 Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets PURPLE COMPANY Comparative Balance Sheets December 31 Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities $ 647,500 298,000 349,500 179,150 (18,125) 152,225 42,450 $ 109,775 Current Year Prior Year $ 86,500 $ 69,400 85,400 295, 156 1,340 63,625 264,800 2,155 451,296 144,500 (43,125) $ 552,671 $ 66,141 72,400 138,541 182,250 57,000 174,880 $ 552,671 417,080 121,000 (52,500) $ 485,580. Equity Common stock, $5 par value. Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions a. Sold equipment for cash. b. Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term note for the balance. c. Paid cash to reduce the long-term note. Required: Prepare a complete statement of cash flows using the direct method. Note: Amounts to be deducted should be indicated with a minus sign. $ 134,175 70,350 204,525 163,250 117,805 $ 485,580
Transcribed Image Text:Required information [The following information applies to the questions displayed below.] Purple Company's current year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, and (4) all debits to Accounts Payable reflect cash payments for inventory. PURPLE COMPANY Income Statement For Current Year Ended December 31 Sales Cost of goods sold Gross profit Operating expenses (excluding depreciation) $ 145,400 33,750 Depreciation expense Other gains (losses) Loss on sale of equipment Income before taxes Income taxes expense Net income Assets Cash Accounts receivable Inventory Prepaid expenses Total current assets PURPLE COMPANY Comparative Balance Sheets December 31 Equipment Accumulated depreciation-Equipment Total assets Liabilities and Equity Accounts payable Long-term notes payable Total liabilities $ 647,500 298,000 349,500 179,150 (18,125) 152,225 42,450 $ 109,775 Current Year Prior Year $ 86,500 $ 69,400 85,400 295, 156 1,340 63,625 264,800 2,155 451,296 144,500 (43,125) $ 552,671 $ 66,141 72,400 138,541 182,250 57,000 174,880 $ 552,671 417,080 121,000 (52,500) $ 485,580. Equity Common stock, $5 par value. Paid-in capital in excess of par, common stock Retained earnings Total liabilities and equity Additional Information on Current Year Transactions a. Sold equipment for cash. b. Purchased equipment costing $109,375 by paying $56,000 cash and signing a long-term note for the balance. c. Paid cash to reduce the long-term note. Required: Prepare a complete statement of cash flows using the direct method. Note: Amounts to be deducted should be indicated with a minus sign. $ 134,175 70,350 204,525 163,250 117,805 $ 485,580
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