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Transaction Data for 2018: $ 38,000 Payment of notes payable $ 46,100 Issuance of common stock for çash 24,000 Payment of cash dividends 50,000 Depreciation expense 74,000 Issuance of notes payable to borrow cash Purchase of equipment with cash Acquisition of land by issuing long-term notes payable 62,000 119,000 Gain on sale of building 4,500 ook value of building sold 54,000 Net income 68,500 Prepare Morganson's statement of cash flows using the indirect method. Include an accompanying schedule of non-cash investing and financing activitio

Transaction Data for 2018: $ 38,000 Payment of notes payable $ 46,100 Issuance of common stock for çash 24,000 Payment of cash dividends 50,000 Depreciation expense 74,000 Issuance of notes payable to borrow cash Purchase of equipment with cash Acquisition of land by issuing long-term notes payable 62,000 119,000 Gain on sale of building 4,500 ook value of building sold 54,000 Net income 68,500 Prepare Morganson's statement of cash flows using the indirect method. Include an accompanying schedule of non-cash investing and financing activitio

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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Question 33
785 The Statement of Cash Flows > Problems Group A Learning Objectives 1, 2 P14-32A Identifving the purpose and preparing the statement of cash flows- indirect method American Rare Coins (ARC) was formed on January 1, 2018. Additional data for the year follow: 2. Net Income $266,400 4. Net Cash Used by Op. Act. S(48,000) a. On January 1, 2018, ARC issued no par common stock for $450,000. b. Early in January, ARC made the following cash payments: 1. For store fixtures, $53,000 2. For merchandise inventory, $340,000 3. For rent expense on a store building, $20,000 c. Later in the year, ARC purchased merchandise inventory on account for $239,000. Before year-end, ARC paid $139,000 of this accounts payable. d. During 2018, ARC sold 2,400 units of merchandise inventory for $275 each. Betore year-end, the company collected 85% of this amount. Cost of goods sold for the year was $250,000, and ending merchandise inventory totaled $329,000. e. The store employs three people. The combined annual payroll is $96,000, of which ARC still owes $3,000 at year-end. f. At the end of the year, ARC paid income tax of $17,000. There are no income taxes payable. g. Late in 2018, ARC paid cash dividends of $44,000. h. For store fixtures, ARC uses the straight-line depreciation method, over five years, with zero residual value. Requirements 1. What is the purpose of the statement of cash flows? 2. Prepare ARC's income statement for the year ended December 31, 2018. Use the single-step format, with all revenues listed together and all expenses listed together. 3. Prepare ARC's balance sheet at December 31, 2018. 4. Prepare ARC's statement of cash flows using the indirect method for the year ended December 31, 2018. P14-33A Preparing the statement of cash flows-indirect method Learning Objective 2 Accountants for Morganson, Inc. have assembled the following data for the year ended December 31, 2018: Net Cash Used for Inv. Act. $(15,500) 2018 2017 Current Assets: Cash $ 99,400 $ 25,000 Accounts Receivable 64,100 69,700 Merchandise Inventory 83,000 75,000 Current Liabilities: Accounts Payable 57,600 55,200 Income Tax Payable 14,800 16,800
Transcribed Image Text:785 The Statement of Cash Flows > Problems Group A Learning Objectives 1, 2 P14-32A Identifving the purpose and preparing the statement of cash flows- indirect method American Rare Coins (ARC) was formed on January 1, 2018. Additional data for the year follow: 2. Net Income $266,400 4. Net Cash Used by Op. Act. S(48,000) a. On January 1, 2018, ARC issued no par common stock for $450,000. b. Early in January, ARC made the following cash payments: 1. For store fixtures, $53,000 2. For merchandise inventory, $340,000 3. For rent expense on a store building, $20,000 c. Later in the year, ARC purchased merchandise inventory on account for $239,000. Before year-end, ARC paid $139,000 of this accounts payable. d. During 2018, ARC sold 2,400 units of merchandise inventory for $275 each. Betore year-end, the company collected 85% of this amount. Cost of goods sold for the year was $250,000, and ending merchandise inventory totaled $329,000. e. The store employs three people. The combined annual payroll is $96,000, of which ARC still owes $3,000 at year-end. f. At the end of the year, ARC paid income tax of $17,000. There are no income taxes payable. g. Late in 2018, ARC paid cash dividends of $44,000. h. For store fixtures, ARC uses the straight-line depreciation method, over five years, with zero residual value. Requirements 1. What is the purpose of the statement of cash flows? 2. Prepare ARC's income statement for the year ended December 31, 2018. Use the single-step format, with all revenues listed together and all expenses listed together. 3. Prepare ARC's balance sheet at December 31, 2018. 4. Prepare ARC's statement of cash flows using the indirect method for the year ended December 31, 2018. P14-33A Preparing the statement of cash flows-indirect method Learning Objective 2 Accountants for Morganson, Inc. have assembled the following data for the year ended December 31, 2018: Net Cash Used for Inv. Act. $(15,500) 2018 2017 Current Assets: Cash $ 99,400 $ 25,000 Accounts Receivable 64,100 69,700 Merchandise Inventory 83,000 75,000 Current Liabilities: Accounts Payable 57,600 55,200 Income Tax Payable 14,800 16,800
784 chapter 14 Transaction Data for 2018: $ 38,000 Payment of notes payable $ 46,100 $ Issuance of common stock for çash 50,000 24,000 Payment of cash dividends Depreciation expense Issuance of notes payable to borrow cash 62,000 74,000 Purchase of equipment with cash Gain on sale of building 119,000 4,500 Acquisition of land by issuing long-term notes payable 54,000 Net income 68,500 Book value of building sold Prepare Morganson's statement of cash flows using the indirect method. Include an accompanying schedule of non-cash investing and financing activities. Learning Objective 2 P14-34A Preparing the statement of cash flows-indirect method with non-cash transactions The 2018 income statement and comparative balance sheet of Rolling Hills, Inc. Net Cash Prov. by Op. Act. $125,100 follow: ROLLING HILLS, INC. Income Statement Year Ended December 31, 2018 Net Sales Revenue $ 440,000 Cost of Goods Sold 209,200 Gross Profit 230,800 Operating Expenses: Salaries Expense $ 77,400 Depreciation Expense-Plant Assets Other Operating Expenses 14,400 Total Operating Expenses 10,200 Operating Income 102,000 Other Income and (Expenses): 128 200 Interort D
Transcribed Image Text:784 chapter 14 Transaction Data for 2018: $ 38,000 Payment of notes payable $ 46,100 $ Issuance of common stock for çash 50,000 24,000 Payment of cash dividends Depreciation expense Issuance of notes payable to borrow cash 62,000 74,000 Purchase of equipment with cash Gain on sale of building 119,000 4,500 Acquisition of land by issuing long-term notes payable 54,000 Net income 68,500 Book value of building sold Prepare Morganson's statement of cash flows using the indirect method. Include an accompanying schedule of non-cash investing and financing activities. Learning Objective 2 P14-34A Preparing the statement of cash flows-indirect method with non-cash transactions The 2018 income statement and comparative balance sheet of Rolling Hills, Inc. Net Cash Prov. by Op. Act. $125,100 follow: ROLLING HILLS, INC. Income Statement Year Ended December 31, 2018 Net Sales Revenue $ 440,000 Cost of Goods Sold 209,200 Gross Profit 230,800 Operating Expenses: Salaries Expense $ 77,400 Depreciation Expense-Plant Assets Other Operating Expenses 14,400 Total Operating Expenses 10,200 Operating Income 102,000 Other Income and (Expenses): 128 200 Interort D
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