use attachment and additional information to answer the following Required: a. Write a statement of cashflows (indirect method) for the year ended December 31,Year 2. CHECK Year 2 CFO, $0 b. Prepare a side-by-side comparative statement contrasting two bases of reporting: (1) net income and (2) cash flows from operations. c. Which of the two financial reports in(b)better reflects profitability? Explain. Additional data for the period January 1, Year 2, through December 31, Year 2, are: Sales on account,$70,000. Purchases on account,$40,000. Depreciation,$5,000. Expenses paid in cash,$18,000(including$4,000 of interest and $6,000 in taxes). Decrease in inventory, $2,000. Sales of fixed assets for $6,000 cash; cost $21,000 and two-thirds depreciated (loss or gain is included in income). Purchase of fixed assets for cash, $4,000. Fixed assets are exchanged for bonds payable of $30,000. Sale of investments for $9,000 cash. Purchase of treasury stock for cash, $11,500. Retire bonds payable by issuing common stock, $10,000. Collections on accounts receivable,$65,000. Sold unissued common stock for cash,$1,000.
use attachment and additional information to answer the following
Required:
a. Write a statement of cashflows (indirect method) for the year ended December 31,Year 2.
CHECK Year 2 CFO, $0
b. Prepare a side-by-side comparative statement contrasting two bases of reporting: (1) net income and (2)
c. Which of the two financial reports in(b)better reflects profitability? Explain.
Additional data for the period January 1, Year 2, through December 31, Year 2, are:
Sales on account,$70,000.
Purchases on account,$40,000.
Depreciation,$5,000.
Expenses paid in cash,$18,000(including$4,000 of interest and $6,000 in taxes).
Decrease in inventory, $2,000.
Sales of fixed assets for $6,000 cash; cost $21,000 and two-thirds
Purchase of fixed assets for cash, $4,000.
Fixed assets are exchanged for bonds payable of $30,000.
Sale of investments for $9,000 cash.
Purchase of
Retire bonds payable by issuing common stock, $10,000.
Collections on
Sold unissued common stock for cash,$1,000.
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