Prepare a schedule of change from an accrual basis

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the income statement and other selected data for the Boyer Company are shown below:

BOYER COMPANY

Income Statement

For Year Ended December 31, 2002

 

Sales

 

$19,000

Operating expenses:

   

Depreciation expense

$ 2,300

 

Other operating expenses

12,000

14,300

Operating income

 

4,700

Loss on sale of land

 

1,500

Income before tax expense

 

3,200

 

Tax expense

 

1,000

Net income

 

$2,200

Supplemental information:

     

a. Dividends declared and paid

 

$ 800

 

b. Land purchased

 

3,000

c. Land sold

 

500

d. Equipment purchased

 

2,000

 

e. Bonds payable retired

 

2,000

 

f. Common stock sold

 

1,400

g. Land acquired in exchange for common stock

 

3,000

 

h. Increase in accounts receivable

 

400

 

i. Increase in inventories

 

800

 

j. Increase in accounts payable

 

500

 

k. Decrease in income taxes payable

 

400

 

Required a. Prepare a schedule of change from an accrual basis to a cash basis income statement.

b. Using the schedule of change from accrual basis to cash basis income statement computed in (a), present the cash provided by operations, using (1) the direct approach and (2) the indirect approach.

Reference no: EM13975906

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