Reference no: EM131203359
The management team of Wickersham Brothers Inc. is preparing its annual financial statements. Information for the Statement of Cash Flows is indicated below. Compute the changes and use the information to finalize the Statement of Cash Flows as indicated in the next page. ANALYSIS PAGE Current Year Prior Year CHANGE Balance Sheet Assets Cash $ 50,000 $ 72,000 $22,000 Accounts Receivable 80,000 70,000 ($10,000) Merchandise Inventory 60,000 65,000 $5,000 Property And Equipment 110,000 60,000 ($50,000) Less: Accumulated Depreciation (30,000) (15,000) $15,000 Total Assets $270,000 $252,000 Liabilities: Accounts Payable $ 10,000 $ 12,000 $2,000 Salaries and Wages Payable 2,000 1,000 (2,000) Notes Payable, Long-Term 50,000 60,000 $10,000 Stockholders’ Equity: Common Stock 100,000 80,000 ($20,000) Retained Earnings 108,000 99,000 ($9,000) Total Liabilities and Stockholders’ Equity $270,000 $252,000 Income Statement Sales $200,000 Cost of Goods Sold 110,000 Depreciation Expense 15,000 Other Expenses 50,000 Net Income $ 25,000 Other information from the company’s records includes the following: ? Bought equipment for cash, $50,000. ? Paid $10,000 on long-term note payable. ? Issued new shares of common stock for $20,000 cash. ? Cash dividends of $16,000 were declared and paid to stockholders. ? Accounts Payable arose from inventory purchases on credit. ? Income Tax Expense ($4,000) and Interest Expense ($3,000) were paid in full at the end of both years and are included in Other Expenses. Required: Prepare the statement of cash flows using the indirect method. 16 POINTS Wickersham Brothers, Inc. Statement of Cash Flows For the Year Ended December 31 CASH FLOW FROM OPERATING ACTIVITIES NET INCOME 25,000 Adjustments to Reconcile net income to net cash provided by operations: Add Depreciation $15,000 Subtract AR Increase ($10,000) Changes in current assets and current liabilities: Add Inventory Decrease $5,000 Add Salaries and Wages Payable Increase $2,000 Net cash provided by (used in) operating activities $37,000 Cash Flows from Investing Activities: Equipment Purchased ($50,000) Net Cash Provided by (used) in Investing Activities ($50,000) Cash Flows from Financing Activities: Obtained Long Term Bank $10,000 Net Cash Provided by (used) in Financing Activities $10,000 Net Increase (Decrease) in Cash and Cash Equivalents Cash and Cash Equivalents at Beginning of Year 72,000 Cash and Cash Equivalents at End of Year
What would be the annual ordering cost
: Tom Wassink's irrigation shop uses 3,500 sprinkler heads during the course of a year, and this usage is relatively constant throughout the year. These sprinkler heads are purchased from a supplier 100 miles away for $9.50 each, and the lead time is 3..
|
The new product according to the new pricing policy
: Bramlett Company has several divisions and just built a new plant with a capacity of 20,000 units of a new product. A standard costing system has been introduced to aid in evaluating managers' performance and for establishing a selling price for the ..
|
Individual accounts receivable in subsidiary ledger
: Below are four specific control objectives. Classify each objective according to the following types of control activities: (1) authorization, (2) accuracy of input, (3) completeness and accuracy of accumulated data, and (4) physical controls. The in..
|
Expected net realizable value of accounts receivable
: The following transactions were completed by The Irvine Company during the current fiscal year ended December 31: Feb. 8 Received 40% of the $18,000 balance owed by DeCoy Co., a bankrupt business, and wrote off the remainder as uncollectible. Determi..
|
Information for the statement of cash flows
: The management team of Wickersham Brothers Inc. is preparing its annual financial statements. Information for the Statement of Cash Flows is indicated below. Compute the changes and use the information to finalize the Statement of Cash Flows as indic..
|
Preparing its planning budget the company estimated
: Adger Corporation is a service company that measures its output based on the number of customers served. When preparing its planning budget the company estimated that it would serve 35 customers per month; however, during May the company actually ser..
|
Determine the most beneficial use of constrained resource
: What criteria should a company use when it is deciding whether to continue to make a product internally or to buy it externally? What is the best calculation to determine the most beneficial use of a Constrained Resource?
|
Benedict retirement planning
: Benedict is 37 years old and would like to establish a retirement plan. Develop a spreadsheet model that could be used to assist Benedict with retirement planning. Assume that Benedict’s employer contributes 6% of Benedict’s salary to his retirement ..
|