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The comparative balance sheets and income statements for Gypsy Company follow. Balance Sheets As of December 31 Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment Land Total assets Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and equity Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land $34,320 (13,603) 20,717 (3,417) 17,300 750 (90) Year 2 $24,778 1,632 6,274 23,247 (10,999) 16,990 $61,922 $2,504 2,865 20,100 36,453 $61,922 Year 1 $2,711 979 5,882 44,987 (17,972) 10,480 $47,067 $4,045 6,549 9,000 27,473 $47,067

The comparative balance sheets and income statements for Gypsy Company follow. Balance Sheets As of December 31 Assets Cash Accounts receivable Inventory Equipment Accumulated depreciation-equipment Land Total assets Liabilities and equity Accounts payable (inventory) Long-term debt Common stock Retained earnings Total liabilities and equity Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land $34,320 (13,603) 20,717 (3,417) 17,300 750 (90) Year 2 $24,778 1,632 6,274 23,247 (10,999) 16,990 $61,922 $2,504 2,865 20,100 36,453 $61,922 Year 1 $2,711 979 5,882 44,987 (17,972) 10,480 $47,067 $4,045 6,549 9,000 27,473 $47,067

FINANCIAL ACCOUNTING
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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Problem 12-18A (Algo) Using financial statements to prepare a statement of cash flows-indirect method LO 12-1, 12-3, 12-4 The comparative balance sheets and income statements for Gypsy Company follow. Balance Sheets As of December 31 Assets Cash Accounts receivable. Inventory Equipment Accumulated depreciation-equipment Land Total assets Liabilities and equity Accounts payable (inventory) Long-term debt. Common stock Retained earnings Total liabilities and equity Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold. Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income $34,320 (13,603) 20,717 (3,417) 17,300 750 (90) $34,320 (13,603) 20,717 (3,417) 17,300 750 (90) $17,960 Year 2 $24,778 1,632 6,274 23,247 (10,999) 16,990 $61,922 $2,504 2,865 20,100 36,453 $61,922 Year 1 $2,711 979 5,882 44,987 (17,972) 10,480 $47,867 $4,045 6,549 9,000 27,473 $47,067 Additional Data 1. During Year 2, the company sold equipment for $18,960; it had originally cost $28,600. Accumulated depreciation on this equipment was $10,390 at the time of the sale. Also, the company purchased equipment for $6,860 cash. 2. The company sold land that had cost $4,590. This land was sold for $4,500, resulting in the recognition of a $90 loss. Also, common stock was issued in exchange for title to land that was valued at $11,100 at the time of exchange. 3. Paid dividends of $8,980.
Transcribed Image Text:Problem 12-18A (Algo) Using financial statements to prepare a statement of cash flows-indirect method LO 12-1, 12-3, 12-4 The comparative balance sheets and income statements for Gypsy Company follow. Balance Sheets As of December 31 Assets Cash Accounts receivable. Inventory Equipment Accumulated depreciation-equipment Land Total assets Liabilities and equity Accounts payable (inventory) Long-term debt. Common stock Retained earnings Total liabilities and equity Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Income Statement For the Year Ended December 31, Year 2 Sales revenue Cost of goods sold. Gross margin Depreciation expense Operating income Gain on sale of equipment Loss on disposal of land Net income $34,320 (13,603) 20,717 (3,417) 17,300 750 (90) $34,320 (13,603) 20,717 (3,417) 17,300 750 (90) $17,960 Year 2 $24,778 1,632 6,274 23,247 (10,999) 16,990 $61,922 $2,504 2,865 20,100 36,453 $61,922 Year 1 $2,711 979 5,882 44,987 (17,972) 10,480 $47,867 $4,045 6,549 9,000 27,473 $47,067 Additional Data 1. During Year 2, the company sold equipment for $18,960; it had originally cost $28,600. Accumulated depreciation on this equipment was $10,390 at the time of the sale. Also, the company purchased equipment for $6,860 cash. 2. The company sold land that had cost $4,590. This land was sold for $4,500, resulting in the recognition of a $90 loss. Also, common stock was issued in exchange for title to land that was valued at $11,100 at the time of exchange. 3. Paid dividends of $8,980.
Cash flows from operating activities: Less: Increases in current assets and decreases in current liabilities: Plus: Noncash charges Cash flows from investing activities: Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from financing activities: Ending cash balance Schedule of noncash investing and financing activities: $ $ 0 0 0 0 0
Transcribed Image Text:Cash flows from operating activities: Less: Increases in current assets and decreases in current liabilities: Plus: Noncash charges Cash flows from investing activities: Statement of Cash Flows For the Year Ended December 31, Year 2 Cash flows from financing activities: Ending cash balance Schedule of noncash investing and financing activities: $ $ 0 0 0 0 0
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