The comparative balance sheets and income statements for Gypsy Company follow:Additional DataDuring Year 2, the company sold equipment for $21,500; it had originally cost $36,000. Accumulated depreciation on this equipment was $16,000 at the time of the sale.The company sold land that had cost $6,000. This land was sold for $5,900, resulting in the recognition of a $100 loss.Also, common stock was issued in exchange for title to land that was valued at $22,000 at the time of exchange. RequiredPrepare a statement of cash flows using the indirect method (don’t forget the supplementary noncash activities shown after the statement). The comparative balance sheets and income statements for Gypsy Company follow:Balance SheetsAs of December 31Year 2Year 1AssetsCashAccounts receivableInventoryEquipmentAccumulated depreciation-equipmentS 32,5004,75011,20045,000(17,800)28,000S 16,3002,8009,80052,000(21,800)12,000S 71,100LandTotal assetsS103,650Liabilities and equityAccounts payable (inventory)Long-term debtCommon stockRetained earningsTotal liabilities and equityS 3,7505,80047,00047,100$ 4,9007,80025,00033,400$103,650S 71,100Income StatementFor the Year Ended December 31, Year 2S 61,200(24,500)36,700(12,000)24,7001,500 |(100)S 26,100Sales revenueCost of goods soldGross marginDepreciation expenseOperating incomeGain on sale of equipmentLoss on disposal of landNet incomeAdditional Data1. During Year 2, the company sold equipment for $21,500; it had originally cost $36,000. Accumulateddepreciation on this equipment was $16,000 at the time of the sale.2.The company sold land that had cost $6,000. This land was sold for $5,900, resulting in the recognition of a$100 loss.3. Álso, common stock was issued in exchange for title to land that was valued at $22,000 at the time ofexchange.RequiredPrepare a statement of cash flows using the indirect method (don't forget the supplementary noncash activitiesshown after the statement).

Cash flow statements are the statements that determine the inflow and outflow of cash from three…

The comparative balance sheets and income statements for Gypsy Company follow: Balance Sheets As of December 31 Year 2 Year 1 Assets S 32,500 4,750 11,200 45,000 (17,800) 28,000 $ 16,300 2,800 9,800 52,000 (21,800) 12,000 Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment Land Total assets S103,650 S 71,100 Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and equity $ 3,750 5,800 47,000 47,100 S 4,900 7,800 25,000 33,400 $103,650 S 71,100 Income Statement For the Year Ended December 31, Year 2 S 61,200 (24,500) Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land 36,700 (12,000) 24,700 1,500 | (100) S 26,100 Net income Additional Data 1. During Year 2, the company sold equipment for $21,500; it had originally cost $36,000. Accumulated depreciation on this equipment was $16,000 at the time of the sale. 2. The company sold land that had cost $6,000. This land was sold for $5,900, resulting in the recognition of a $100 loss. 3. Also, common stock was issued in exchange for title to land that was valued at $22,000 at the time of exchange. Required Prepare a statement of cash flows using the indirect method (don't forget the supplementary noncash activities shown after the statement).

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q