The comparative balance sheets and an income statement for Raceway Corporation follow. Balance Sheets As of December 31 Assets Cash Accounts receivable Inventory Prepaid rent Equipment Accumulated depreciation Land Total assets Liabilities Accounts payable (inventory) Salaries payable Stockholders' equity Common stock, $50 par value Retained earnings Total liabilities and equity Income Statement For the Year Ended December 31, Year 2 Sales Cost of goods sold Gross profit Operating expenses Year 2 $61, 339 28, 418 156, 774 2,395 259, 520 (138, 830) 194, 188 $563, 796 $65, 792 24, 267 253,000 220, 737 $563, 796 $1,495,000 (794,543) 700,457 (20,610) (22,540) (259, 320) Year 1 (258,350) $139,637 $41, 170 29,849 172,459 4,799 287,678 (230,570) 81, 180 $377,539 74,638 20, 809 201,000 81, 100 $377,530 Depreciation expense Rent expense Salaries expense other operating expenses Net income Other Information 1. Purchased land for $113,000. 2. Purchased new equipment for $104,600. 3. Sold old equipment that cost $132.750 with accumulated depreciation of $112,350 for $20,400 cash. 4. Issued common stock for $52,000. Required Prepare the statement of cash flows for Year 2 using the indirect method. (Cash outflows should be indicated with a m
The comparative balance sheets and an income statement for Raceway Corporation follow. Balance Sheets As of December 31 Assets Cash Accounts receivable Inventory Prepaid rent Equipment Accumulated depreciation Land Total assets Liabilities Accounts payable (inventory) Salaries payable Stockholders' equity Common stock, $50 par value Retained earnings Total liabilities and equity Income Statement For the Year Ended December 31, Year 2 Sales Cost of goods sold Gross profit Operating expenses Year 2 $61, 339 28, 418 156, 774 2,395 259, 520 (138, 830) 194, 188 $563, 796 $65, 792 24, 267 253,000 220, 737 $563, 796 $1,495,000 (794,543) 700,457 (20,610) (22,540) (259, 320) Year 1 (258,350) $139,637 $41, 170 29,849 172,459 4,799 287,678 (230,570) 81, 180 $377,539 74,638 20, 809 201,000 81, 100 $377,530 Depreciation expense Rent expense Salaries expense other operating expenses Net income Other Information 1. Purchased land for $113,000. 2. Purchased new equipment for $104,600. 3. Sold old equipment that cost $132.750 with accumulated depreciation of $112,350 for $20,400 cash. 4. Issued common stock for $52,000. Required Prepare the statement of cash flows for Year 2 using the indirect method. (Cash outflows should be indicated with a m
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:11
03:03:45
The comparative balance sheets and an income statement for Raceway Corporation follow.
Balance Sheets
As of December 31
Assets
Cash
Accounts receivable
Inventory
Prepaid rent
Equipment
Accumulated depreciation
Land
Total assets
Liabilities
Accounts payable (inventory)
Salaries payable
Stockholders' equity
Common stock, $50 par value
Retained earnings
Total liabilities and equity
Income Statement
For the Year Ended December 31, Year 2
Sales
Cost of goods sold
Gross profit
Operating expenses
Year 2
$61, 339
28,418
156, 774
Cash flows from operating activities:
2,395
259, 520
(138, 830)
194, 180
$563, 796
$65, 792
24, 267
253,000
220, 737
$563,796
$1,495,000
(794,543)
700,457
(20,610)
(22,540)
(259, 320)
(258,350)
$139,637
Year 1
$41, 170
20, 840
450
172,
RACEWAY CORPORATION
Statement of Cash Flows
For the Year Ended December 31, Year 2
4,790
287,678
(230,570)
81, 188
$377,538
Depreciation expense
Rent expense
Salaries expense
other operating expenses
Net income
Other Information
1. Purchased land for $113,000.
2. Purchased new equipment for $104,600.
3. Sold old equipment that cost $132.750 with accumulated depreciation of $112,350 for $20,400 cash.
4. Issued common stock for $52,000.
74,630
20, 800
201, 009
81, 100
$377,539
Required
Prepare the statement of cash flows for Year 2 using the indirect method. (Cash outflows should be indicated with a minus sign.)
Transcribed Image Text:Required
Prepare the statement of cash flows for Year 2 using the indirect method. (Cash outflows should be indicated with a minus sign.)
Cash flows from operating activities:
Plus: Decreases in current assets and increases in current liabilities
Less: Increases in current assets and decreases in current liabilities:
Plus: Noncash charges
Cash flows from investing activities:
RACEWAY CORPORATION
Statement of Cash Flows
For the Year Ended December 31, Year 2
Cash flows from financing activities:
Ending cash balance
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