The following financial statements were drawn from the records of Thornton Shoes: Assets Cash Balance Sheets As of December 31 Accounts receivable Merchandise inventory Notes receivable Equipment Accumulated depreciation- equipment Land Total assets Liabilities Accounts payable Salaries payable Utilities payable. Interest payable Notes payable (long-term) Common stock Retained earnings Year 2 $123,695 54,547 Cost of goods sold Gross margin 123, 811 0 141, 100 (68,370) 80,000 $454,783 $ 41,879 27, 188 653 301,700 83,363 Total liabilities and equity $454,783 0 0 Operating expenses Salaries expense Depreciation expense Utilities expense Operating income Nonoperating items. Interest expense Loss on the sale of equipment_ Net income $ Income Statement For the Year Ended December 31, Year 2 Sales revenue $588,910 $ 26,540 63, 160 112,020 28,000 250,700 (135,590) 50,000 $ 394,830 $ (292,423) 296,487 Year 1 61,500 239,900 19,525 $394,830 (186, 140) (15,910) (11,890) 82,547 (2,526) (1,630) 78,391 48,460 21,750 1,305 2,390 Additional Information 1. Sold equipment costing $109,600 with accumulated depreciation of $83,130 for $24,840 cash. 2. Paid a $14,553 cash dividend to owners.
The following financial statements were drawn from the records of Thornton Shoes: Assets Cash Balance Sheets As of December 31 Accounts receivable Merchandise inventory Notes receivable Equipment Accumulated depreciation- equipment Land Total assets Liabilities Accounts payable Salaries payable Utilities payable. Interest payable Notes payable (long-term) Common stock Retained earnings Year 2 $123,695 54,547 Cost of goods sold Gross margin 123, 811 0 141, 100 (68,370) 80,000 $454,783 $ 41,879 27, 188 653 301,700 83,363 Total liabilities and equity $454,783 0 0 Operating expenses Salaries expense Depreciation expense Utilities expense Operating income Nonoperating items. Interest expense Loss on the sale of equipment_ Net income $ Income Statement For the Year Ended December 31, Year 2 Sales revenue $588,910 $ 26,540 63, 160 112,020 28,000 250,700 (135,590) 50,000 $ 394,830 $ (292,423) 296,487 Year 1 61,500 239,900 19,525 $394,830 (186, 140) (15,910) (11,890) 82,547 (2,526) (1,630) 78,391 48,460 21,750 1,305 2,390 Additional Information 1. Sold equipment costing $109,600 with accumulated depreciation of $83,130 for $24,840 cash. 2. Paid a $14,553 cash dividend to owners.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
![The following financial statements were drawn from the records of Thornton Shoes:
Balance Sheets
As of December 31
Assets
Cash
Accounts receivable
Merchandise inventory
Notes receivable
Equipment
Accumulated depreciation-
equipment
Land
Total assets
Liabilities
Accounts payable
Salaries payable
Utilities payable
Interest payable
Notes payable (long-term)
Common stock
Retained earnings
Year 2
$123,695
54,547
123,811
Cost of goods sold
Gross margin
0
141, 100
(68,370)
80,000
$454,783
$ 41,879 $
27, 188
653
301,700
83,363
Total liabilities and equity $454,783
0
0
Income Statement
For the Year Ended December 31, Year 2
Sales revenue
Operating expenses
Salaries expense
Depreciation expense
Utilities expense
Operating income
Nonoperating items
Interest expense
Loss on the sale of equipment
Net income
Year 1
$ 26,540
63, 160
112,020
28,000
250,700
(135,590)
50,000
$ 394,830
$ 588,910
61,500
239,900
19,525
$ 394,830
(292,423)
296, 487
(186,140)
(15,910)
(11,890)
82,547
(2,526)
(1,630)
48,460
21,750
$78,391
1,305
2,390
Additional Information
1. Sold equipment costing $109,600 with accumulated depreciation of $83,130 for $24,840 cash.
2. Paid a $14,553 cash dividend to owners.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8b2762f3-d482-43b3-ab6d-90531c56b146%2Fe14df0ea-cb26-4011-8378-47c8bd95c383%2F776dk1g_processed.png&w=3840&q=75)
Transcribed Image Text:The following financial statements were drawn from the records of Thornton Shoes:
Balance Sheets
As of December 31
Assets
Cash
Accounts receivable
Merchandise inventory
Notes receivable
Equipment
Accumulated depreciation-
equipment
Land
Total assets
Liabilities
Accounts payable
Salaries payable
Utilities payable
Interest payable
Notes payable (long-term)
Common stock
Retained earnings
Year 2
$123,695
54,547
123,811
Cost of goods sold
Gross margin
0
141, 100
(68,370)
80,000
$454,783
$ 41,879 $
27, 188
653
301,700
83,363
Total liabilities and equity $454,783
0
0
Income Statement
For the Year Ended December 31, Year 2
Sales revenue
Operating expenses
Salaries expense
Depreciation expense
Utilities expense
Operating income
Nonoperating items
Interest expense
Loss on the sale of equipment
Net income
Year 1
$ 26,540
63, 160
112,020
28,000
250,700
(135,590)
50,000
$ 394,830
$ 588,910
61,500
239,900
19,525
$ 394,830
(292,423)
296, 487
(186,140)
(15,910)
(11,890)
82,547
(2,526)
(1,630)
48,460
21,750
$78,391
1,305
2,390
Additional Information
1. Sold equipment costing $109,600 with accumulated depreciation of $83,130 for $24,840 cash.
2. Paid a $14,553 cash dividend to owners.
![1. Sold equipment costing $109,600 with accumulated depreciation of $83,130 for $24,840 cash.
2. Paid a $14,553 cash dividend to owners.
Required:
Analyze the data and prepare a statement of cash flows using the direct method. (Amounts to be deducted and cash
outflows should be indicated by a minus sign.)
THORNTON SHOES
Statement of Cash Flows
For the Year Ended December 31, Year 2
Cash Flows From Operating
Activities:
Cash receipts from customers
Cash Payments for:
Total cash outflows
Cash Flows from Investing
Activities:
Cash Flows from Financing
Activities:
Ending cash balance
$
0
0
0
0
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F8b2762f3-d482-43b3-ab6d-90531c56b146%2Fe14df0ea-cb26-4011-8378-47c8bd95c383%2Fdo45jir_processed.png&w=3840&q=75)
Transcribed Image Text:1. Sold equipment costing $109,600 with accumulated depreciation of $83,130 for $24,840 cash.
2. Paid a $14,553 cash dividend to owners.
Required:
Analyze the data and prepare a statement of cash flows using the direct method. (Amounts to be deducted and cash
outflows should be indicated by a minus sign.)
THORNTON SHOES
Statement of Cash Flows
For the Year Ended December 31, Year 2
Cash Flows From Operating
Activities:
Cash receipts from customers
Cash Payments for:
Total cash outflows
Cash Flows from Investing
Activities:
Cash Flows from Financing
Activities:
Ending cash balance
$
0
0
0
0
0
0
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