The financial statements of Bait and Tackle are presented below. Prepare a statement of cash flows using both the direct and indirect method. Additional information:Operating expenses are composed of: Depreciation $12,000; Salaries $50,000; Loss on Sale of Equipment $9,000; other operating expenses $64,000.Other operating expenses are cash expenses.Equipment was purchased during the year for $135,000 cash.Equipment was sold for cash during the year. The original cost of the equipment was $60,000, and the accumulated depreciation was $45,000.Dividends were declared and paid during the year. Bait and TackleBalance SheetAs at December 3120172016$24,00050,00088.000Cash$39,000Accounts receivable64,000InventoryEquipmentAccumulated depreciationTotal assets58,000325,000250,000(92.000)$394.000(125,000)$287,000Accounts payableIncome taxes payableBank loan payable$32,000$40,00010,00011,00020,000Common shares60,00050,000Retained earningsTotal liabilities and shareholders` equity272.000$394.000186.000$287.000 Bait and TackleIncome StatementFor the Year Ended December 31, 2017SalesCost of goods soldGross profitOperating expensesOperating incomeInterest expenseIncome before taxesIncome taxesNet income$635,000320.000315,000135.000180,0001.000179,00043.000$136.000

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Answered: The financial statements of Bait and…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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The financial statements of Bait and Tackle are presented below. Prepare a statement of cash flows using both the direct and indirect method.

Additional information:

Operating expenses are composed of: Depreciation $12,000; Salaries $50,000; Loss on Sale of Equipment $9,000; other operating expenses $64,000.
Other operating expenses are cash expenses.
Equipment was purchased during the year for $135,000 cash.
Equipment was sold for cash during the year. The original cost of the equipment was $60,000, and the accumulated depreciation was $45,000.
Dividends were declared and paid during the year.

Bait and Tackle
Balance Sheet
As at December 31
2017
2016
$24,000
50,000
88.000
Cash
$39,000
Accounts receivable
64,000
Inventory
Equipment
Accumulated depreciation
Total assets
58,000
325,000
250,000
(92.000)
$394.000
(125,000)
$287,000
Accounts payable
Income taxes payable
Bank loan payable
$32,000
$40,000
10,000
11,000
20,000
Common shares
60,000
50,000
Retained earnings
Total liabilities and shareholders` equity
272.000
$394.000
186.000
$287.000

Bait and Tackle
Income Statement
For the Year Ended December 31, 2017
Sales
Cost of goods sold
Gross profit
Operating expenses
Operating income
Interest expense
Income before taxes
Income taxes
Net income
$635,000
320.000
315,000
135.000
180,000
1.000
179,000
43.000
$136.000

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