t the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Harlan Mining Co. for 2015 and 2014 are provided below. BALANCE SHEETS 12/31/15 12/31/14 Cash $306,000 $144,000 Accounts receivable 270,000 162,000 Inventory 288,000 360,000 PPE $456,000 $720,000 Less: acc. dep.(240,000) 216,000 (228,000) 492,000 $1,080,000 $1,158,000 Accounts payable $ 132,000 $ 72,000 Income taxes payable 264,000 294,000 Bonds payable 270,000 450,000 Common stock 162,000 162,000 Retained earnings 252,000 180,000 $1,080,000 $1,158,000 INCOME STATEMENT For the Year Ended December 31, 2015 Sales revenue $6,300,000 Cost of sales (5,364,000) Gross profit 936,000 Selling expenses $450,000 Administrative expenses 144,000 (594,000) Income from operations 342,000 Interest expense (54,000) Income before taxes 288,000 Income taxes (72,000) Net income $ 216,000 The following additional data were provided: 1.Dividends for the year 2015 were $144,000. 2.During the year, equipment was sold for $180,000. This equipment cost $264,000 originally and had a book value of $216,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales. 3.All depreciation expense is in the selling expense category. Questions 1 through 5 relate to a statement of cash flows (direct method) for the year ended December 31, 2015, for Harlan Mining Company.
Harlan Mining Co. has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of
12/31/15 12/31/14
Cash $306,000 $144,000
Inventory 288,000 360,000
PPE $456,000 $720,000
Less: acc. dep.(240,000) 216,000 (228,000) 492,000
$1,080,000 $1,158,000
Accounts payable $ 132,000 $ 72,000
Income taxes payable 264,000 294,000
Bonds payable 270,000 450,000
Common stock 162,000 162,000
$1,080,000 $1,158,000
INCOME STATEMENT
For the Year Ended December 31, 2015
Sales revenue $6,300,000
Cost of sales (5,364,000)
Gross profit 936,000
Selling expenses $450,000
Administrative expenses 144,000 (594,000)
Income from operations 342,000
Interest expense (54,000)
Income before taxes 288,000
Income taxes (72,000)
Net income $ 216,000
The following additional data were provided:
1.Dividends for the year 2015 were $144,000.
2.During the year, equipment was sold for $180,000. This equipment cost $264,000 originally and had a book value of $216,000 at the time of sale. The loss on sale was incorrectly charged to cost of sales.
3.All
Questions 1 through 5 relate to a statement of cash flows (direct method) for the year ended December 31, 2015, for Harlan Mining Company.
5. The net cash provided (used) by financing activites is
a. $(180,000).
b. $36,000.
c. $(324,000).
d. $144,000.
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