Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition
Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition
1st Edition
ISBN: 9780134047430
Author: Elizabeth A. Gordon, Jana S. Raedy, Alexander J. Sannella
Publisher: PEARSON
bartleby

Concept explainers

bartleby

Videos

Textbook Question
Book Icon
Chapter 22, Problem 22.8P

Statement of Cash Flows, Indirect Method, Complex Accounts, Disclosures. Prepare the cash flow statement for Norwich Manufacturing, Inc. under the direct method using the information provided in P22-7. Provide all required disclosures.

Norwich Manufacturing, Inc.

Balance Sheets

At December 31

Assets Current Year Prior Year
Current Assets
Cash $ 45,000 $ 22,000
Available-for-Sale Debt Investments 58,000 82,000
Accounts Receivable - net 95,000 55,000
Merchandise Inventory 135,000 95,000
Total Current Assets $ 333,000 $254,000

Norwich Manufacturing, Inc.

Balance Sheets

At December 31

Current Year Prior Year
Noncurrent Assets
Investments in Affiliate Companies $ 265,000 $ 100,500
Property. Plant, and Equipment - net 1,364,500 1,530,500
Intangible Assets - net 87,500 125,000
Total Noncurrent Assets $ 1,717,000 $1,756,000
Total Assets $2,050,000 $2,010,000
Liabilities
Current Liabilities
Current Portion of Long-Term Debt $ 25,000 $ 65,800
Accounts Payable 187,000 128,500
Dividends Payable 75,000 55,000
Income Taxes Payable 65,800 58,500
Total Current Liabilities $ 352,800 $ 307,800
Noncurrent Liabilities
Bonds Payable $ 400,000 $ 400,000
Less: Discount on Bonds (128,500) (145,000)
Notes Payable 225,500 225,000
Deferred Tax Liability 62,500 72,500
Net Obligations under Pension Plans 80,000 60,000
Total Noncurrent Liabilities $ 639,500 $ 612,500
Total Liabilities $ 992,300 $ 920,300
Shareholders' Equity
Common Stock. $1 par value $ 135,000 $ 135,000
Additional Paid-in Capital in Excess of Par - Common 351,500 351,500
Additional Paid-in Capital - Stock Options 16,500 0
Retained Earnings 685,000 523,700
Accumulated Other Comprehensive Income (130,300) 79,500
Total Shareholders' Equity $ 1,057,700 $1,089,700
Total Liabilities and Shareholders' Equity $2,050,000 $2,010,000

Norwich Manufacturing, Inc.

Income Statement

For the Current Year Ended December 31

Sales $2,433,244
Cost of Goods Sold 1,459,946
Gross Profit $ 973,298
Selling, General, and Administrative Expenses $ 59,800
Pension Expense 260,510
Bad Debt Expense 1,650
Depreciation Expense 19,470
Amortization Expense 7,425
 Total Operating Expenses $ 348,855
Operating Income $ 624,443
Interest Expense $ (55,110)
Investment Income (includes gain on sale) 55,000
Equity Earnings from Affiliate Companies 164,500
Income before Tax $ 788,833
Income Tax Expense (301,873)
Net Income $ 486,960

Additional information

  • Norwich sold available-for-sale investments that had been acquired for $55,000 at a gain of $40, 500 It included this gain in investment income on the income statement.
  • The company acquired additional shares as investments to be earned at fair value It accounted for all investments except for investments carried under the equity method as available-for-sale securities It recorded a $9, 000 unrealized loss for the current year.
  • It reported accounts receivable net of the allowance for bad debts
  • It sold equipment at book value.
  • It did not increase its percentage ownership of its equity investee (affiliate company)
  • It sold one of its franchises at book value
  • It signed a $100,000 promissory note issued by an equipment dealer in the acquisition of a plant asset
  • It did not borrow additional cash funds during the year

Required

Prepare Norwich Manufacturing s cash flow statement for the current year using the indirect method Present required disclosures.

Blurred answer
Students have asked these similar questions
Monty Corp. sells coffee beans, which are sensitive to price fluctuations. The following inventory information is available for this product at December 31, 2017: Coffee Bean Units Unit Cost Market Market Coffea arabica 12,800 bags $ 5.40 $ 5.37 3.40 3.50 Coffea robusta 4,000 bags Calculate Tascon's inventory by applying the lower-of-cost-or-market basis. Tascon's inventory $
City Honda has total equity of $560,000; sales of $2,250,000; current assets of $700,000; and total liabilities of $435,000. What is City Honda's total asset turnover? Need correct answer of this accounting problem
City Honda has total equity of $560,000; sales of $2,250,000; current assets of $700,000; and total liabilities of $435,000. What is City Honda's total asset turnover? Solve this financial accounting problem

Chapter 22 Solutions

Intermediate Accounting - Myaccountinglab - Pearson Etext Access Card Student Value Edition

Ch. 22 - Prob. 22.11QCh. 22 - What approach is used in preparing the operating...Ch. 22 - Under the indirect method, do firms subtract bond...Ch. 22 - Do firms subtract pension expense from net income...Ch. 22 - Prob. 22.15QCh. 22 - Prob. 22.16QCh. 22 - Prob. 22.1MCCh. 22 - Prob. 22.2MCCh. 22 - Big Dollars Corporation's comparative financial...Ch. 22 - Prob. 22.4MCCh. 22 - Prob. 22.5MCCh. 22 - Sykes Corporation's comparative balance sheets at...Ch. 22 - Prob. 22.7MCCh. 22 - Prob. 22.8MCCh. 22 - Prob. 22.1BECh. 22 - Prob. 22.2BECh. 22 - Prob. 22.3BECh. 22 - Prob. 22.4BECh. 22 - Prob. 22.5BECh. 22 - Prob. 22.6BECh. 22 - Prob. 22.7BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.9BECh. 22 - Prob. 22.10BECh. 22 - Prob. 22.11BECh. 22 - Prob. 22.12BECh. 22 - Prob. 22.13BECh. 22 - Operating Activities Section, Indirect Method,...Ch. 22 - Prob. 22.15BECh. 22 - Prob. 22.16BECh. 22 - Prob. 22.17BECh. 22 - Prob. 22.18BECh. 22 - Prob. 22.19BECh. 22 - Prob. 22.20BECh. 22 - Prob. 22.21BECh. 22 - Prob. 22.22BECh. 22 - Complex Transactions, Acquisitions and...Ch. 22 - Prob. 22.24BECh. 22 - Prob. 22.25BECh. 22 - Complex Transactions, Change in Accounts...Ch. 22 - Prob. 22.1ECh. 22 - Prob. 22.2ECh. 22 - Prob. 22.3ECh. 22 - Prob. 22.4ECh. 22 - Prob. 22.5ECh. 22 - Prob. 22.6ECh. 22 - Statement of Cash Flows, Indirect Method,...Ch. 22 - Prob. 22.8ECh. 22 - Prob. 22.9ECh. 22 - Prob. 22.10ECh. 22 - Statement of Cash Flows, Indirect Method....Ch. 22 - Prob. 22.15ECh. 22 - Prob. 22.16ECh. 22 - Prepare Statement of Cash Flows, Direct Method....Ch. 22 - Prob. 22.2PCh. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Statement of Cash Flows, Indirect Method, Complex...Ch. 22 - Prob. 22.11PCh. 22 - Prob. 22.12PCh. 22 - Prob. 22.13PCh. 22 - Prob. 22.14PCh. 22 - Prob. 1JCCh. 22 - Prob. 1FSACCh. 22 - Prob. 1SSCCh. 22 - Surfing the Standards Case 2: Cash Flow per Share...Ch. 22 - Basis for Conclusions Cases Basis for Conclusions...Ch. 22 - Basis for Conclusions Case 2: Indirect versus...

Additional Business Textbook Solutions

Find more solutions based on key concepts
Knowledge Booster
Background pattern image
Accounting
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.
Similar questions
SEE MORE QUESTIONS
Recommended textbooks for you
Text book image
Financial Accounting: The Impact on Decision Make...
Accounting
ISBN:9781305654174
Author:Gary A. Porter, Curtis L. Norton
Publisher:Cengage Learning
Text book image
College Accounting (Book Only): A Career Approach
Accounting
ISBN:9781337280570
Author:Scott, Cathy J.
Publisher:South-Western College Pub
Text book image
Financial Accounting Intro Concepts Meth/Uses
Finance
ISBN:9781285595047
Author:Weil
Publisher:Cengage
Text book image
Intermediate Accounting: Reporting And Analysis
Accounting
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:Cengage Learning
Text book image
Cornerstones of Financial Accounting
Accounting
ISBN:9781337690881
Author:Jay Rich, Jeff Jones
Publisher:Cengage Learning
Text book image
Financial Accounting
Accounting
ISBN:9781337272124
Author:Carl Warren, James M. Reeve, Jonathan Duchac
Publisher:Cengage Learning
The KEY to Understanding Financial Statements; Author: Accounting Stuff;https://www.youtube.com/watch?v=_F6a0ddbjtI;License: Standard Youtube License