The comparative balance sheets and income statements for Gypsy Company follow. Balance Sheets As of December 31 Year 2 Year 1 Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment $ 23,066 2,363 6,234 22,388 (11,285) 16,234 $ 59,000 $ 2,721 1,418 5,844 43,788 (18,341) 8,914 $ 44,344 Land Total assets Liabilities and equity Accounts payable (inventory) Long-term debt Common stock $ 2,714 2,858 21,400 32,028 4,384 6,532 9,000 24,428 Retained earnings Total liabilities and equity $ 59,000 $ 44,344 Income Statement For the Year Ended December 31, Year 2 $ 30,250 (11,990) 18, 260 (3,680) 14,580 700 (80) Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income $ 15,200 Additional Data 1. During Year 2, the company sold equipment for $18,364; it had originally cost $28,400. Accumulated depreciation on this equipment was $10,736 at the time of the sale. Also, the company purchased equipment for $7,000 cash. 2. The company sold land that had cost $5,080. This land was sold for $5,000, resulting in the recognition of a $80 loss. Also, common stock was issued in exchange for title to land that was valued at $12,400 at the time of exchange. 3. Paid dividends of $7,600.
The comparative balance sheets and income statements for Gypsy Company follow. Balance Sheets As of December 31 Year 2 Year 1 Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment $ 23,066 2,363 6,234 22,388 (11,285) 16,234 $ 59,000 $ 2,721 1,418 5,844 43,788 (18,341) 8,914 $ 44,344 Land Total assets Liabilities and equity Accounts payable (inventory) Long-term debt Common stock $ 2,714 2,858 21,400 32,028 4,384 6,532 9,000 24,428 Retained earnings Total liabilities and equity $ 59,000 $ 44,344 Income Statement For the Year Ended December 31, Year 2 $ 30,250 (11,990) 18, 260 (3,680) 14,580 700 (80) Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income $ 15,200 Additional Data 1. During Year 2, the company sold equipment for $18,364; it had originally cost $28,400. Accumulated depreciation on this equipment was $10,736 at the time of the sale. Also, the company purchased equipment for $7,000 cash. 2. The company sold land that had cost $5,080. This land was sold for $5,000, resulting in the recognition of a $80 loss. Also, common stock was issued in exchange for title to land that was valued at $12,400 at the time of exchange. 3. Paid dividends of $7,600.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter15: Statement Of Cash Flows
Section: Chapter Questions
Problem 18E
Related questions
Question
Answer full question.
Transcribed Image Text:1
Required
Prepare a statement of cash flows using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
GYPSY COMPANY
Statement of Cash Flows
10
For the Year Ended December 31, Year 2
points
Cash flows from operating activities:
Less: Increases in current assets and Decreases in current liabilities:
Plus: Noncash charges
Transcribed Image Text:1
The comparative balance sheets and income statements for Gypsy Company follow.
Balance Sheets
As of December 31
Year 2
Year 1
Assets
$ 23,066
2,363
6,234
22,388
(11,285)
16,234
$ 59,000
Cash
10
points
Accounts receivable
Inventory
Equipment
Accumulated depreciation-equipment
$ 2,721
1,418
5,844
43,788
(18,341)
8,914
Land
eBook
Total assets
$ 44,344
Liabilities and equity
Accounts payable (inventory)
Long-term debt
Common stock
Retained earnings
$ 2,714
2,858
21,400
32,028
$ 59,000
$ 4,384
6,532
9,800
24,428
Total liabilities and equity
$ 44,344
Income Statement
For the Year Ended December 31, Year 2
$ 30,250
(11,990)
18,260
(3,680)
14,580
700
(80)
Sales revenue
Cost of goods sold
Gross margin
Depreciation expense
Operating income
Gain on sale of equipment
Loss on disposal of land
Net income
$ 15,200
Additional Data
1. During Year 2, the company sold equipment for $18,364; it had originally cost $28,400. Accumulated depreciation on this
equipment was $10,736 at the time of the sale. Also, the company purchased equipment for $7,000 cash,
2. The company sold land that had cost $5,080. This land was sold for $5,000, resulting in the recognition of a $80 loss. Also,
common stock was issued in exchange for title to land that was valued at $12,400 at the time of exchange.
3. Paid dividends of $7,60O.
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