The 2014 comparative balance sheet and 2014 income statement of Byfield Co Ltd, have just been distributed at a meeting of the company’s board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the following :Financial info to be used : ( images attached with notes)Requirements Reconstruct the company’s comparative balance sheet for 2013/2014 using the information and compute and show the missing figures to include the appropriate sign as a positive or negative figure. Which category of the statement of cash flow is considered as the most important? Why? Prepare a complete statement of cash flows for 2014 using the indirect method using the information. Simple Things Industries LtdIncome StatementYear Ended December 31,2014Revenues and gains:Sales revenue1,900,00020,000Gain on sale of equipmentTotal revenues and gainsExpensesCost of goods soldDepreciation expenseOther operating expenseTotal expensesIncome before income taxes1,920,000850,000190,000360,0001,400,000520,000180,000Income tax expenseNet Income340,000NotesAcquisition of plant asset during 2014320,000Sale proceed from sale of equipment120,000Receipt for issuance of notes payable10,000Payment for note payable100,000Dividend paid100,000Book value of equipment sold100,000 Simple Things Industries Ltd.Comparative Balance SheetDecember 31, 2014 and 201320142013 Increase/(Decrease)Assets15,000220,000340,00010,000105,000830,0001,520,000Cash175,000230,000310,00030,000?Accounts Receivable?Inventories?Prepaid expensesIntangible assetsEquipment, net?105,000860,000?Total Assets1,710,000LiabilitiesAccounts payableAccrued liabilitiesIncome tax payableLong-term notes payableStockholders' Equity90,000140,000160,000140,000450,000?190,000?120,000360,000?Common Stock400,000640,000250,000400,000?Retained earningsTreasury stockTotal liabilities and stockholders' equity(90,000)1,710,000(20,000)1,520,000

Answered: The 2014 comparative balance sheet and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Question

The 2014 comparative balance sheet and 2014 income statement of Byfield Co Ltd, have just been distributed at a meeting of the company’s board of directors. The members of the board of directors were desirous of knowing the reason or reasons why the cash balance different from the net income. The company uses the indirect method to prepare the statement of cash flows and it is expected that this should be able to provide the needed clarity required by the directors. The directors have asked each student from your accounting course to assist with the needed clarification and have put forward the following :

Financial info to be used : ( images attached with notes)

Requirements

Reconstruct the company’s comparative balance sheet for 2013/2014 using the information and compute and show the missing figures to include the appropriate sign as a positive or negative figure.

Which category of the statement of cash flow is considered as the most important? Why?

Prepare a complete statement of cash flows for 2014 using the indirect method using the information.

Simple Things Industries Ltd
Income Statement
Year Ended December 31,2014
Revenues and gains:
Sales revenue
1,900,000
20,000
Gain on sale of equipment
Total revenues and gains
Expenses
Cost of goods sold
Depreciation expense
Other operating expense
Total expenses
Income before income taxes
1,920,000
850,000
190,000
360,000
1,400,000
520,000
180,000
Income tax expense
Net Income
340,000
Notes
Acquisition of plant asset during 2014
320,000
Sale proceed from sale of equipment
120,000
Receipt for issuance of notes payable
10,000
Payment for note payable
100,000
Dividend paid
100,000
Book value of equipment sold
100,000

Simple Things Industries Ltd.
Comparative Balance Sheet
December 31, 2014 and 2013
2014
2013 Increase/(Decrease)
Assets
15,000
220,000
340,000
10,000
105,000
830,000
1,520,000
Cash
175,000
230,000
310,000
30,000
?
Accounts Receivable
?
Inventories
?
Prepaid expenses
Intangible assets
Equipment, net
?
105,000
860,000
?
Total Assets
1,710,000
Liabilities
Accounts payable
Accrued liabilities
Income tax payable
Long-term notes payable
Stockholders' Equity
90,000
140,000
160,000
140,000
450,000
?
190,000
?
120,000
360,000
?
Common Stock
400,000
640,000
250,000
400,000
?
Retained earnings
Treasury stock
Total liabilities and stockholders' equity
(90,000)
1,710,000
(20,000)
1,520,000

Expert Solution

Step 1

Because of time constraint, here is the solution for first part. Resubmit the question and you will surely get the solution.

In comparative balance sheet financial position of an organization is compared over different periods.

Step by step

Solved in 2 steps with 1 images

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions