Westhoff, Incorporated Balance Sheet At December 31 Assets Current Assets Cash Ending Beginning $ 7,000 $ 3,500 Accounts Receivable - net 8,500 8,000 Merchandise Inventory 2,300 4,000 Prepaid Insurance 1,700 2,200 Total Current Assets $ 19,500 $ 17,700 Noncurrent Assets Investments $ 12,000 $ 24,300 Property, Plant, and Equipment - net 75,000 Total Noncurrent Assets $ 87,000 Total Assets $106,500 58,000 $ 82,300 $100,000 Liabilities Current Liabilities Accounts Payable $ 4,500 $ 1,000 Accrued Expenses Income Taxes Payable Total Current Liabilities 9,800 6,000 5,120 4,850 $ 20,300 $ 10,970 Noncurrent Liabilities Notes Payable $ 31,000 $ 42,630 Total Noncurrent Liabilities $ 31,000 $ 42,630 Total Liabilities $ 51,300 $ 53,600 Shareholders' Equity Common Stock, $1 par value Additional Paid-in Capital in Excess of Par - Common Retained Earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity $ 9,000 $ 9,000 20,000 26,200 20,000 17,400 $ 55,200 $ 46,400 $106,500 $100,000 Sales Cost of Goods Sold Westhoff, Incorporated Income Statement For the Year Ended December 31 Gross Profit Selling, General, and Administrative Expenses Depreciation Expense Total Operating Expenses Operating Income Interest Expense Interest Revenue Income before Tax Income Tax Expense $80,085 48,051 $32,034 $10,700 2,400 $13,100 $18,934 $ (4,000) 3,400 $18,334 (7,334) $11,000 Net Income Prepare the operating activities section of the cash flow statement using the direct method. Assume that accrued expenses relate to selling, general, and administrative expenses. All acquisitions of property, plant, and equipment were made using cash.
Westhoff, Incorporated Balance Sheet At December 31 Assets Current Assets Cash Ending Beginning $ 7,000 $ 3,500 Accounts Receivable - net 8,500 8,000 Merchandise Inventory 2,300 4,000 Prepaid Insurance 1,700 2,200 Total Current Assets $ 19,500 $ 17,700 Noncurrent Assets Investments $ 12,000 $ 24,300 Property, Plant, and Equipment - net 75,000 Total Noncurrent Assets $ 87,000 Total Assets $106,500 58,000 $ 82,300 $100,000 Liabilities Current Liabilities Accounts Payable $ 4,500 $ 1,000 Accrued Expenses Income Taxes Payable Total Current Liabilities 9,800 6,000 5,120 4,850 $ 20,300 $ 10,970 Noncurrent Liabilities Notes Payable $ 31,000 $ 42,630 Total Noncurrent Liabilities $ 31,000 $ 42,630 Total Liabilities $ 51,300 $ 53,600 Shareholders' Equity Common Stock, $1 par value Additional Paid-in Capital in Excess of Par - Common Retained Earnings Total Shareholders' Equity Total Liabilities and Shareholders' Equity $ 9,000 $ 9,000 20,000 26,200 20,000 17,400 $ 55,200 $ 46,400 $106,500 $100,000 Sales Cost of Goods Sold Westhoff, Incorporated Income Statement For the Year Ended December 31 Gross Profit Selling, General, and Administrative Expenses Depreciation Expense Total Operating Expenses Operating Income Interest Expense Interest Revenue Income before Tax Income Tax Expense $80,085 48,051 $32,034 $10,700 2,400 $13,100 $18,934 $ (4,000) 3,400 $18,334 (7,334) $11,000 Net Income Prepare the operating activities section of the cash flow statement using the direct method. Assume that accrued expenses relate to selling, general, and administrative expenses. All acquisitions of property, plant, and equipment were made using cash.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
I am having some difficulty understanding the steps to prepare the direct method
Transcribed Image Text:Westhoff, Incorporated
Balance Sheet
At December 31
Assets
Current Assets
Cash
Ending
Beginning
$
7,000
$ 3,500
Accounts Receivable - net
8,500
8,000
Merchandise Inventory
2,300
4,000
Prepaid Insurance
1,700
2,200
Total Current Assets
$ 19,500
$ 17,700
Noncurrent Assets
Investments
$ 12,000
$ 24,300
Property, Plant, and Equipment - net
75,000
Total Noncurrent Assets
$ 87,000
Total Assets
$106,500
58,000
$ 82,300
$100,000
Liabilities
Current Liabilities
Accounts Payable
$ 4,500
$ 1,000
Accrued Expenses
Income Taxes Payable
Total Current Liabilities
9,800
6,000
5,120
4,850
$ 20,300
$ 10,970
Noncurrent Liabilities
Notes Payable
$ 31,000
$ 42,630
Total Noncurrent Liabilities
$ 31,000
$ 42,630
Total Liabilities
$ 51,300
$ 53,600
Shareholders' Equity
Common Stock, $1 par value
Additional Paid-in Capital in Excess of Par - Common
Retained Earnings
Total Shareholders' Equity
Total Liabilities and Shareholders' Equity
$ 9,000
$ 9,000
20,000
26,200
20,000
17,400
$ 55,200
$ 46,400
$106,500
$100,000
Transcribed Image Text:Sales
Cost of Goods Sold
Westhoff, Incorporated
Income Statement
For the Year Ended December 31
Gross Profit
Selling, General, and Administrative Expenses
Depreciation Expense
Total Operating Expenses
Operating Income
Interest Expense
Interest Revenue
Income before Tax
Income Tax Expense
$80,085
48,051
$32,034
$10,700
2,400
$13,100
$18,934
$ (4,000)
3,400
$18,334
(7,334)
$11,000
Net Income
Prepare the operating activities section of the cash flow statement using the
direct method. Assume that accrued expenses relate to selling, general, and
administrative expenses. All acquisitions of property, plant, and equipment were made
using cash.
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