Use the following information for Problems 14-48 and 14-49: Booth Manufacturing has provided the following financial statements. Booth Manufacturing Comparative Balance Sheets At December 31, 20XI and 20X2 20X1 20X2 Assets Cash $ 112,500 $ 350,000 Accounts reccivable 350,000 281,250 Inventories 125,000 150,000 Plant and equipment Accumulated depreciation 1,000,000 1,025,000 (500,000) (525,000) Land 500,000 718,750 Total assets $1,587,500 $2,000,000 Liabilities and equity Accounts payable Mortgage payable Common stock $ 300,000 $ 237,500 250,000 75,000 75,000 Paid-in capital in excess of par Retained carnings 300,000 300,000 912,500 1,137,500 Total liabilities and equity $1,587,500 $2000,000 Booth Manufacturing Income Statement For the Year Ended December 31, 20X2 Revenues Gain on sale of cquipment Cost of goods sold Depreciation cxpense Interest expense $1,200,000 50,000 (640,000) (125,000) (35,000) Net income $ 450,000 Other information includes: (a) equipment with a book value of $125,000 was sold for $175,000 (original cost was $225,000) and (b) dividends of $225,000 were declared and paid.
Use the following information for Problems 14-48 and 14-49: Booth Manufacturing has provided the following financial statements. Booth Manufacturing Comparative Balance Sheets At December 31, 20XI and 20X2 20X1 20X2 Assets Cash $ 112,500 $ 350,000 Accounts reccivable 350,000 281,250 Inventories 125,000 150,000 Plant and equipment Accumulated depreciation 1,000,000 1,025,000 (500,000) (525,000) Land 500,000 718,750 Total assets $1,587,500 $2,000,000 Liabilities and equity Accounts payable Mortgage payable Common stock $ 300,000 $ 237,500 250,000 75,000 75,000 Paid-in capital in excess of par Retained carnings 300,000 300,000 912,500 1,137,500 Total liabilities and equity $1,587,500 $2000,000 Booth Manufacturing Income Statement For the Year Ended December 31, 20X2 Revenues Gain on sale of cquipment Cost of goods sold Depreciation cxpense Interest expense $1,200,000 50,000 (640,000) (125,000) (35,000) Net income $ 450,000 Other information includes: (a) equipment with a book value of $125,000 was sold for $175,000 (original cost was $225,000) and (b) dividends of $225,000 were declared and paid.
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Refer to the information for Booth Manufacturing above.
Required:
1. Calculate the
2. Prepare a statement of cash flows.
3. CONCEPTUAL CONNECTION Search the Internet to find a statement of cash flows.
Which method was used—the indirect method or the direct method? How does the net
income reported compare to the operating cash flows? To the change in cash flows?
Transcribed Image Text:Use the following information for Problems 14-48 and 14-49:
Booth Manufacturing has provided the following financial statements.
Booth Manufacturing
Comparative Balance Sheets
At December 31, 20XI and 20X2
20X1
20X2
Assets
Cash
$ 112,500
$ 350,000
Accounts reccivable
350,000
281,250
Inventories
125,000
150,000
Plant and equipment
Accumulated depreciation
1,000,000
1,025,000
(500,000)
(525,000)
Land
500,000
718,750
Total assets
$1,587,500
$2,000,000
Liabilities and equity
Accounts payable
Mortgage payable
Common stock
$ 300,000
$ 237,500
250,000
75,000
75,000
Paid-in capital in excess of par
Retained carnings
300,000
300,000
912,500
1,137,500
Total liabilities and equity
$1,587,500
$2000,000
Booth Manufacturing
Income Statement
For the Year Ended December 31, 20X2
Revenues
Gain on sale of cquipment
Cost of goods sold
Depreciation cxpense
Interest expense
$1,200,000
50,000
(640,000)
(125,000)
(35,000)
Net income
$ 450,000
Other information includes: (a) equipment with a book value of $125,000 was sold for
$175,000 (original cost was $225,000) and (b) dividends of $225,000 were declared and paid.
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