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Additional information:1.New equipment costing $79,000 was purchased for cash during the year.2.Old equipment having an original cost of $56,000 was sold for $12,500 cash.3.Bonds matured and were paid off at face value for cash.4.A cash dividend of $46,500 was declared and paid during the year.Prepare a statement of cash flows using the indirect method

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Complete Question:

ODGERS INC.

Comparative Balance Sheets at December 31, 2013 and 2014

Assets 2014 2013 Changes

Cash $127,664 $76,472 + $51,192

Accounts receivable 138,724 60,040 + 78,684

Inventory 177,750 162,503 +15,247

Prepaid expenses 44,872 41,080 +3,792

Long-term investments 218,040 172,220 +45,820

Plant assets 450,300 383,150 +67,150

Accumulated depreciation (79,000) (82,160) -(3,160)

Total $1,078,350 $813,305

Liabilities and Stockholders' Equity:

Accounts payable $161,160 $106,334 +$54,826

Accrued expenses payable 26,070 33,180 -7,110

Bonds payable 173,800 230,680 -56,880

Common stock 347,600 276,500 +71,100

Retained earnings 369,720 166,611 +203,109

Total $1,078,350 $813,305

ODGERS INC.

Income STatement Data

For the Year Ended December 31, 2014

Sales revenue $613,767

Less:

Cost of goods sold $214,027

Operating expenses, excluding

depreciation 19,608

Depreciation expense 73,470

Income tax expense 43,102

Interest expense 7,473

Loss on disposal of plant assets 11,850 $369,530

Net income $244,237

Additional information:

1. New equipment costing $158,000 was purchased for cash during the year.

2. Old equipment having an original cost of $90,850 and accumulated depreciation of $76,630 was sold for $2,370 cash.

3. Bonds matured and were paid off at face value for cash.

4. A cash dividend of $41,128 was declared and paid during the year.

Prepare a statement of cash flows using the indirect method.

Answer:

Odgers Inc.

ODGERS INC.

Statement of Cash Flows

For the Year Ended December 31, 2014

Operating activities:

Net income $244,237

Loss on disposal of plant assets 11,850

Depreciation expense 73,470

Accrued expenses payable (7,110)

Inventory (15,247)

Accounts receivable (78,684)

Prepaid expenses (3,792)

Accounts payable 54,826

Net cash (operating activities) $279,550

Investing activities:

Purchase of equipment ($158,000)

Long-term investments (45,820)

Sale of equipment 2,370

Net cash (investing activities) ($201,450)

Financing activities:

Repayment of bonds ($56,880)

Cash dividend (41,128)

Common stock issue 71,100

Net cash (financing activities) ($26,908)

Net cash inflow $51,192

Step-by-step explanation:

a) Data and Calculations:

Net income $244,237

Loss on disposal of plant assets 11,850

Depreciation expense 73,470

Net cash by operating activities $329,550

1. Purchase of equipment $158,000

2. Sale of equipment $2,370

3. Repayment of bonds $56,880

4. Cash dividend $41,128

Note: The figures of additional information have been changed to agree with the complete question.

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