The comparative balance sheet of Iglesias Inc. for December 31, 20Y3 and 20Y2, is as follows: 1 Dec. 31, 20Y3 Dec. 31, 20Y2 2 Assets 3 Cash $186,000.00 $180,000.00 4 Accounts receivable (net) 540,000.00 480,000.00 5 Inventories 924,000.00 900,000.00 6 Investments 0.00 120,000.00 7 Land 600,000.00 0.00 8 Equipment 1,680,000.00 1,440,000.00 9 Accumulated depreciation-equipment (720,000.00) (600,000.00) 10 Total assets $3,210,000.00 $2,520,000.00 11 Liabilities and Stockholders’ Equity 12 Accounts payable $408,000.00 $360,000.00 13 Accrued expenses payable 54,000.00 60,000.00 14 Dividends payable 36,000.00 30,000.00 15 Common stock, $4 par 840,000.00 720,000.00 16 Excess of paid-in capital over par 240,000.00 210,000.00 17 Retained earnings 1,632,000.00 1,140,000.00 18 Total liabilities and stockholders’ equity $3,210,000.00 $2,520,000.00 The income statement for the year ended December 31, 20Y3, is as follows: 1 Sales $3,600,000.00 2 Cost of merchandise sold 1,680,000.00 3 Gross profit $1,920,000.00 4 Operating expenses: 5 Depreciation expense $120,000.00 6 Other operating expenses 1,140,000.00 7 Total operating expenses 1,260,000.00 8 Operating income $660,000.00 9 Other income: 10 Gain on sale of investments 90,000.00 11 Income before income tax $750,000.00 12 Income tax expense 150,000.00 13 Net income $600,000.00 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: a. The investments were sold for $210,000 cash. b. Equipment and land were acquired for cash. c. There were no disposals of equipment during the year. d. The common stock was issued for cash. e. There was a $108,000 debit to Retained Earnings for cash dividends declared. Required: Prepare a statement of cash flows, using the direct method of presenting cash flows from (used for) operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required.

The comparative balance sheet of Iglesias Inc. for December 31, 20Y3 and 20Y2, is as follows: 1 Dec. 31, 20Y3 Dec. 31, 20Y2 2 Assets 3 Cash $186,000.00 $180,000.00 4 Accounts receivable (net) 540,000.00 480,000.00 5 Inventories 924,000.00 900,000.00 6 Investments 0.00 120,000.00 7 Land 600,000.00 0.00 8 Equipment 1,680,000.00 1,440,000.00 9 Accumulated depreciation-equipment (720,000.00) (600,000.00) 10 Total assets $3,210,000.00 $2,520,000.00 11 Liabilities and Stockholders’ Equity 12 Accounts payable $408,000.00 $360,000.00 13 Accrued expenses payable 54,000.00 60,000.00 14 Dividends payable 36,000.00 30,000.00 15 Common stock, $4 par 840,000.00 720,000.00 16 Excess of paid-in capital over par 240,000.00 210,000.00 17 Retained earnings 1,632,000.00 1,140,000.00 18 Total liabilities and stockholders’ equity $3,210,000.00 $2,520,000.00 The income statement for the year ended December 31, 20Y3, is as follows: 1 Sales $3,600,000.00 2 Cost of merchandise sold 1,680,000.00 3 Gross profit $1,920,000.00 4 Operating expenses: 5 Depreciation expense $120,000.00 6 Other operating expenses 1,140,000.00 7 Total operating expenses 1,260,000.00 8 Operating income $660,000.00 9 Other income: 10 Gain on sale of investments 90,000.00 11 Income before income tax $750,000.00 12 Income tax expense 150,000.00 13 Net income $600,000.00 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: a. The investments were sold for $210,000 cash. b. Equipment and land were acquired for cash. c. There were no disposals of equipment during the year. d. The common stock was issued for cash. e. There was a $108,000 debit to Retained Earnings for cash dividends declared. Required: Prepare a statement of cash flows, using the direct method of presenting cash flows from (used for) operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required.

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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Question

The comparative balance sheet of Iglesias Inc. for December 31, 20Y3 and 20Y2, is as follows:

1		Dec. 31, 20Y3	Dec. 31, 20Y2
2	Assets
3	Cash	$186,000.00	$180,000.00
4	Accounts receivable (net)	540,000.00	480,000.00
5	Inventories	924,000.00	900,000.00
6	Investments	0.00	120,000.00
7	Land	600,000.00	0.00
8	Equipment	1,680,000.00	1,440,000.00
9	Accumulated depreciation-equipment	(720,000.00)	(600,000.00)
10	Total assets	$3,210,000.00	$2,520,000.00
11	Liabilities and Stockholders’ Equity
12	Accounts payable	$408,000.00	$360,000.00
13	Accrued expenses payable	54,000.00	60,000.00
14	Dividends payable	36,000.00	30,000.00
15	Common stock, $4 par	840,000.00	720,000.00
16	Excess of paid-in capital over par	240,000.00	210,000.00
17	Retained earnings	1,632,000.00	1,140,000.00
18	Total liabilities and stockholders’ equity	$3,210,000.00	$2,520,000.00

The income statement for the year ended December 31, 20Y3, is as follows:

1	Sales		$3,600,000.00
2	Cost of merchandise sold		1,680,000.00
3	Gross profit		$1,920,000.00
4	Operating expenses:
5	Depreciation expense	$120,000.00
6	Other operating expenses	1,140,000.00
7	Total operating expenses		1,260,000.00
8	Operating income		$660,000.00
9	Other income:
10	Gain on sale of investments		90,000.00
11	Income before income tax		$750,000.00
12	Income tax expense		150,000.00
13	Net income		$600,000.00

Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:

a.	The investments were sold for $210,000 cash.
b.	Equipment and land were acquired for cash.
c.	There were no disposals of equipment during the year.
d.	The common stock was issued for cash.
e.	There was a $108,000 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the direct method of presenting cash flows from (used for) operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow for each section, if required.

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