Balance Sheet Current Assets Assets M Wallace Services, Ltd. Balance Sheets At December 31 Current Year Prior Year X Income Statement Wallace Services, Ltd. Income Statement Cash 308,675 $ Accounts Receivable - net Supplies Inventory 312,300 807,350 99,160 265,905 604,250 For the Current Year Ended December 31 Service Revenue $ 707,200 Prepaid Expenses 25,225 22,000 Selling, General, and Administrative Expenses Depreciation Expense (280,200) (80,000) Total Current Assets Noncurrent Assets Held-to-Maturity Debt Investments Land Property, Plant, and Equipment 69 $ 1,453,550 $ 991,315 Bad Debt Expense (26,000) Operating Income 321,000 EA $ 73,000 $ 121,000 Interest Expense (24,000) 326,000 204,000 Income before Tax 297,000 999,000 841,300 Tax at 40% (118,800) Accumulated Depreciation (123,000) (43,000) $ 178,200 Net Income Total Noncurrent Assets 1,275,000 $ 1,123,300 $ 2,728,550 $ 2,114,615 Total Assets Liabilities Print Done Current Liabilities Accrued Liabilities $ 310,000 $ 284,800 Accounts Payable 397,300 215,000 $ Total Current Liabilities 707,300 $ 499,800 Noncurrent Liabilities Notes Payable 532,250 $ 210,000 $ Total Noncurrent Liabilities Total Liabilities 532,250 $ 210,000 1,239,550 $ 709,800 Shareholders' Equity Common Stock, no par value $ 349,000 $ 349,000 1,193,300 1,077,815 Retained Earnings Total Shareholders' Equity $ 1,542,300 $ 1,426,815 Less: Treasury Stock at Cost (53,300) (22,000) 2,728,550 $ 2,114,615 Total Liabilities and Shareholders' Equity enter a zero Additional Information • Wallace included the $26,000 loss on disposal of investments in selling, general, and administrative expenses on the income statement. Accrued liabilities relate to selling, general and administrative expenses. All dividends declared are paid in cash. All interest and taxes are paid in cash. Acquisitions of land and property, plant and equipment used cash only. There was no amortization of the held-to-maturity debt investments. There were no adjustments to fair value. Print Done Wallace Services, Ltd. provided the following comparative balance sheets and income statement for the current year. (Click the icon to view the balance sheets.) (Click the icon to view the statement of net income.) (Click the icon to view the additional information.) Requirement Prepare Wallace's cash flow statement for the current year under the indirect method. Assume that accrued liabilities relate to selling, general, and administrative expenses. Complete the statement one section at a time, beginning with the cash flows from operating activities. (Use a minus sign or parentheses for any numbers to be subtracted and/or for cash outflows. If an input field is not used in the statement, leave the field empty; do not select a label or enter a zero.) Ferragosto Services, Ltd. Statement of Cash Flows (Indirect Method) For the Year Ended December 31 Current Year Operating Activities: Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Changes in Operating Working Capital Accounts: Net Cash Provided (Used) by Operating Activities Investing Activities: Net Cash Provided (Used) by Investing Activities Financing Activities: Net Cash Provided (Used) by Financing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year

Balance Sheet Current Assets Assets M Wallace Services, Ltd. Balance Sheets At December 31 Current Year Prior Year X Income Statement Wallace Services, Ltd. Income Statement Cash 308,675 $ Accounts Receivable - net Supplies Inventory 312,300 807,350 99,160 265,905 604,250 For the Current Year Ended December 31 Service Revenue $ 707,200 Prepaid Expenses 25,225 22,000 Selling, General, and Administrative Expenses Depreciation Expense (280,200) (80,000) Total Current Assets Noncurrent Assets Held-to-Maturity Debt Investments Land Property, Plant, and Equipment 69 $ 1,453,550 $ 991,315 Bad Debt Expense (26,000) Operating Income 321,000 EA $ 73,000 $ 121,000 Interest Expense (24,000) 326,000 204,000 Income before Tax 297,000 999,000 841,300 Tax at 40% (118,800) Accumulated Depreciation (123,000) (43,000) $ 178,200 Net Income Total Noncurrent Assets 1,275,000 $ 1,123,300 $ 2,728,550 $ 2,114,615 Total Assets Liabilities Print Done Current Liabilities Accrued Liabilities $ 310,000 $ 284,800 Accounts Payable 397,300 215,000 $ Total Current Liabilities 707,300 $ 499,800 Noncurrent Liabilities Notes Payable 532,250 $ 210,000 $ Total Noncurrent Liabilities Total Liabilities 532,250 $ 210,000 1,239,550 $ 709,800 Shareholders' Equity Common Stock, no par value $ 349,000 $ 349,000 1,193,300 1,077,815 Retained Earnings Total Shareholders' Equity $ 1,542,300 $ 1,426,815 Less: Treasury Stock at Cost (53,300) (22,000) 2,728,550 $ 2,114,615 Total Liabilities and Shareholders' Equity enter a zero Additional Information • Wallace included the $26,000 loss on disposal of investments in selling, general, and administrative expenses on the income statement. Accrued liabilities relate to selling, general and administrative expenses. All dividends declared are paid in cash. All interest and taxes are paid in cash. Acquisitions of land and property, plant and equipment used cash only. There was no amortization of the held-to-maturity debt investments. There were no adjustments to fair value. Print Done Wallace Services, Ltd. provided the following comparative balance sheets and income statement for the current year. (Click the icon to view the balance sheets.) (Click the icon to view the statement of net income.) (Click the icon to view the additional information.) Requirement Prepare Wallace's cash flow statement for the current year under the indirect method. Assume that accrued liabilities relate to selling, general, and administrative expenses. Complete the statement one section at a time, beginning with the cash flows from operating activities. (Use a minus sign or parentheses for any numbers to be subtracted and/or for cash outflows. If an input field is not used in the statement, leave the field empty; do not select a label or enter a zero.) Ferragosto Services, Ltd. Statement of Cash Flows (Indirect Method) For the Year Ended December 31 Current Year Operating Activities: Adjustments to Reconcile Net Income to Net Cash Provided by Operating Activities: Changes in Operating Working Capital Accounts: Net Cash Provided (Used) by Operating Activities Investing Activities: Net Cash Provided (Used) by Investing Activities Financing Activities: Net Cash Provided (Used) by Financing Activities Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents, Beginning of Year Cash and Cash Equivalents, End of Year

International Financial Management

14th Edition

ISBN:9780357130698

Author:Madura

Publisher:Madura

Chapter10: Measuring Exposure To Exchange Rate Fluctuations

Section: Chapter Questions

Problem 2BIC

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