XS Supply Company is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized below: Balance sheet at December 31 Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation Accounts payable Wages payable Note payable, long-term Common stock and additional paid-in capital Retained earnings Income statement for current year Sales Gain on sale of equipment Cost of goods sold Other expenses Net income Current Year Prior Year $ 29,200 $ 34,200 35,500 40,000 121,200 28,600 38,200 100,700 (25,200) (30,500) $ 200,400 $ 171,500 $ 122,000 1,000 72,000 39,000 $ 12,000 $ 27,700 1,700 51,400 $ 36,400 1,600 43,100 89,400 72,800 29,900 17,900 $ 200,400 $ 171,500 Additional data: a. Bought equipment for cash, $32,500. Sold equipment with original cost of $12,000, accumulated depreciation of $9,000, for $4,000 cash. b. Paid $8,300 on the long-term note payable. c. Issued new shares of stock for $16,600 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $14,300; wages, $13,200; taxes, $6,200; and other, $5,300. £ Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes o other expenses, assume that these expenses were fully paid in cash. Required: 1. Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method. Note: Lift carh outflow or nogative amountr
XS Supply Company is developing its annual financial statements at December 31, current year. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized below: Balance sheet at December 31 Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation Accounts payable Wages payable Note payable, long-term Common stock and additional paid-in capital Retained earnings Income statement for current year Sales Gain on sale of equipment Cost of goods sold Other expenses Net income Current Year Prior Year $ 29,200 $ 34,200 35,500 40,000 121,200 28,600 38,200 100,700 (25,200) (30,500) $ 200,400 $ 171,500 $ 122,000 1,000 72,000 39,000 $ 12,000 $ 27,700 1,700 51,400 $ 36,400 1,600 43,100 89,400 72,800 29,900 17,900 $ 200,400 $ 171,500 Additional data: a. Bought equipment for cash, $32,500. Sold equipment with original cost of $12,000, accumulated depreciation of $9,000, for $4,000 cash. b. Paid $8,300 on the long-term note payable. c. Issued new shares of stock for $16,600 cash. d. No dividends were declared or paid. e. Other expenses included depreciation, $14,300; wages, $13,200; taxes, $6,200; and other, $5,300. £ Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes o other expenses, assume that these expenses were fully paid in cash. Required: 1. Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method. Note: Lift carh outflow or nogative amountr
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:XS Supply Company is developing its annual financial statements at December 31, current year. The statements are complete except
for the statement of cash flows. The completed comparative balance sheets and income statement are summarized below:
Balance sheet at December 31
Cash
Accounts receivable
Merchandise inventory
Property and equipment
Less: Accumulated depreciation
Accounts payable
Wages payable
Note payable, long-term
Common stock and additional paid-in capital
Retained earnings
Income statement for current year
Sales
Gain on sale of equipment
Cost of goods sold
Other expenses
Net income
b. Paid $8,300 on the long-term note payable.
c. Issued new shares of stock for $16,600 cash.
Additional data:
a. Bought equipment for cash, $32,500. Sold equipment with original cost of $12,000, accumulated depreciation of $9,000, for
$4,000 cash.
XS SUPPLY COMPANY
Statement of Cash Flows
For the Year Ended December 31, Current Year
Cash flows from operating activities:
Net income
Current Year Prior Year
$ 29,200
$ 34,200
35,500
28,600
40,000
38,200
100, 700
(25,200)
$ 171,500
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation expense
Increase in accounts receivable
Increase in merchandise inventory
Increase in accounts payable
Decrease in wages payable
d. No dividends were declared or paid.
e. Other expenses included depreciation, $14,300; wages, $13,200; taxes, $6,200; and other, $5,300.
Net cash provided by operating activities
Cash flows from investing activities:
Cash payments to purchase equipment
Cash received from sale of equipment
121,200
(30,500)
f. Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or
other expenses, assume that these expenses were fully paid in cash.
Net cash used in investing activities
Cash flows from financing activities:
Cash payments on long-term note
Cash receipts from issuing stock
$ 200,400
Required:
1. Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method.
Note: List cash outflows as negative amounts.
Net cash provided by financing activities
Net increase in cash during the year
Cash balance, January 1, current year
Cash balance, December 31, current year
$36,400
1,600
43,100
89,400
29,900
$ 200,400
$
$ 122,000
1,000
72,000
39,000
$ 12,000
$ 27,700
1,700
51,400
72,800
17,900
$ 171,500
14,300
(6,900)
(1,800)
8,700
(100)
(32,500)
4,000
(8,300)
16,600
$ 12,000
$
14,200
26,200
(28,500)
8,300
5,000
29,200
34,200
Transcribed Image Text:XS Supply Company is developing its annual financial statements at December 31, current year. The statements are complete except
for the statement of cash flows. The completed comparative balance sheets and income statement are summarized below:
Balance sheet at December 31
Cash
Accounts receivable
Merchandise inventory
Property and equipment
Less: Accumulated depreciation
Accounts payable
Wages payable
Note payable, long-term
Common stock and additional paid-in capital
Retained earnings
Income statement for current year
Sales
Gain on sale of equipment
Cost of goods sold
Other expenses
Net income
b. Paid $8,300 on the long-term note payable.
c. Issued new shares of stock for $16,600 cash.
Additional data:
a. Bought equipment for cash, $32,500. Sold equipment with original cost of $12,000, accumulated depreciation of $9,000, for
$4,000 cash.
XS SUPPLY COMPANY
Statement of Cash Flows
For the Year Ended December 31, Current Year
Cash flows from operating activities:
Net income
Current Year Prior Year
$ 29,200
$ 34,200
35,500
28,600
40,000
38,200
100, 700
(25,200)
$ 171,500
Adjustments to reconcile net income to net cash provided
by operating activities:
Depreciation expense
Increase in accounts receivable
Increase in merchandise inventory
Increase in accounts payable
Decrease in wages payable
d. No dividends were declared or paid.
e. Other expenses included depreciation, $14,300; wages, $13,200; taxes, $6,200; and other, $5,300.
Net cash provided by operating activities
Cash flows from investing activities:
Cash payments to purchase equipment
Cash received from sale of equipment
121,200
(30,500)
f. Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or
other expenses, assume that these expenses were fully paid in cash.
Net cash used in investing activities
Cash flows from financing activities:
Cash payments on long-term note
Cash receipts from issuing stock
$ 200,400
Required:
1. Prepare the statement of cash flows for the year ended December 31, current year, using the indirect method.
Note: List cash outflows as negative amounts.
Net cash provided by financing activities
Net increase in cash during the year
Cash balance, January 1, current year
Cash balance, December 31, current year
$36,400
1,600
43,100
89,400
29,900
$ 200,400
$
$ 122,000
1,000
72,000
39,000
$ 12,000
$ 27,700
1,700
51,400
72,800
17,900
$ 171,500
14,300
(6,900)
(1,800)
8,700
(100)
(32,500)
4,000
(8,300)
16,600
$ 12,000
$
14,200
26,200
(28,500)
8,300
5,000
29,200
34,200
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