Briefly explaining the changes within each major cash flow

Assignment Help Accounting Basics
Reference no: EM13308733

Ellwood House, Inc. had the following condensed balance sheet at the end of 2012.

ELLWOOD HOUSE, INC.
Balance Sheet
December 31, 2012
Cash $ 10,000 Current liabilities $ 14,500
Current assets (non-cash) 34,000 Long-term notes payable 30,000
Investments 40,000 Bonds payable 32,000
Plant assets 57,500 Common stock 80,000
Land 38,500 Retained earnings 23,500
$180,000 $180,000

During 2013, the following occurred.

1.Ellwood House, Inc., sold part of its investment portfolio, which was classified as available-for-sale, for $15,500, resulting in a gain of $500 for the firm.
2.Dividends totaling $19,000 were paid to stockholders.
3.A parcel of land was purchased for $5,500.
4.$20,000 of common stock were issued at par.
5.$10,000 of bonds payable were retired at par.
6.Heavy equipment was purchased through the issuance of $32,000 of bonds.
7.Net income for 2013 was $42,000 after deducting depreciation of $13,550.
8.Both current assets (other than cash) and current liabilities remained at the same amount.
1.Prepare a statement of cash flows for 2013, using the indirect method. Assume that current assets (excluding cash) and current liabilities have remained the same on December 31, 2013. The cash balance on December 31, 2013 is $66,050.
2.Draft a one-page letter to Gerald Brauer, president of Ellwood House, Inc., briefly explaining the changes within each major cash flow category. Refer to your cash flow statement whenever necessary.

Reference no: EM13308733

Questions Cloud

Multi-period fixed income capital budgeting : Multi-Period Fixed Income Capital Budgeting
The operating power of a high-end desk top system : You have just been hired by Hewlett Packard (HP) in its capital budgeting division. Your first assignment is to determine the net cash flows and NPV of a proposed new type of portable computer similar in size to an iPhone, but which has the op..
What will be your annual return on $100 invested in fund : What will be your annual return on $100 invested in her fund if she allows you to reinvest in her fund the 1% you earn each day?
The rate of inflation for the next 12 months : The rate of inflation for the next 12 months (t=1) is expected to be 1.4 percent; it is expected to be 1.8 percent the following year (t=2); and 2.0 percent the following year (t=3).Assume that the real risk-free rate is 3 percent for all matu..
Briefly explaining the changes within each major cash flow : Prepare a statement of cash flows for 2013, using the indirect method. Assume that current assets (excluding cash) and current liabilities have remained the same on December 31, 2013. The cash balance on December 31, 2013 is $66,050. 2.Draft ..
General fund and governmental activities general journals. : Amber City borrowed $1,000,000 secured by a 5-year mortgage note. The cash from the note was used to purchase a building for vehicle and equipment maintenance. Show how these two transactions should be recorded in the General Fund and governmen..
Lowest risk of loss for the organization explain : Which payment plan has the lowest risk of loss for the organization? Explain
Defined benefit pension plan balances : Defined benefit pension plan balances
Cash flows for atm software developers using the indirect : Prepare the statement of cash flows for ATM Software Developers using the indirect method.

Reviews

Write a Review

 

Accounting Basics Questions & Answers

  What predetermined overhead rates are used

What predetermined overhead rates would be used in Dept A and Dept B, respectively?

  Journal entry to record cost of goods sold

High Ridge Merchandising Co. sold inventory that had a cost of $10,000. Assuming High Ridge uses the perpetual inventory method, the effect of the journal entry to record Cost of Goods Sold would:

  What is the expected dollar return on the gamble

Suppose that a person won the Florida lottery and was offered a choice of two prizes: (1) $500,000 or (2) a coin-toss gamble in which he or she would get $1 million if a head were flipped and zero for a tail.

  Activity-based costing approach

Using the activity-based costing approach, determine the overhead cost per unit for each product.  Prepare a Schedule of Expected Cash Collections for November and December.    Prepare a Merchandise Purchases Budget for November and December.

  Explain transfer pricing in detail

Explain Transfer Pricing in Detail

  Recording long-term asset purchases

Assume that a company purchases land for $1,000,000, paying $400,000 in cash and borrowing the remainder with a long-term notes payable. How should this transaction be reported on a statement of cash flows?

  Quick ratio-current ratio

Analysts use the quick ratio (also known as the acid test ratio) and the current ratio. The use of both ratios has become common because

  What controls must have been lacking at white electric

What the bookkeeper did was definitely unethical. But what if one of her grandchildren had been ill and needed an expensive operation? If this had been the case, would it have been ethical for her to take company funds to pay for the operation if ..

  Problem related to sole-proprietorship business dealing

You have been running a sole-proprietorship business dealing in cosmetic products. You have been accurately recording all your sale and purchase transactions in journals and using the journals in the general ledger accounts.

  Brief report for the strategic management committee

Prepare a brief report for the Strategic Management Committee outlining the key points of your findings and calculate and discuss the likely impact of the changes

  Consolidated sales and cost of goods sold

During the current year, Top sold merchandise to Bottom for $100,000. The subsidiary still possesses 40 percent of this inventory at the end of the current year. Top had established the transfer price based on its normal markup. What are consolida..

  Calculate the net income

Calculate the balance of Retained Earnings that would appear on a balance sheet at December 31, 2010.

Free Assignment Quote

Assured A++ Grade

Get guaranteed satisfaction & time on delivery in every assignment order you paid with us! We ensure premium quality solution document along with free turntin report!

All rights reserved! Copyrights ©2019-2020 ExpertsMind IT Educational Pvt Ltd