Prepare the financing and investing activities sections

Assignment Help Financial Accounting
Reference no: EM134154

Question :

The comparative year-end balance sheets of Sign Graphics, Inc., revealed the subsequent activity in the company's existing accounts:

20X5 20X4            Increase / Decrease)

Current assets

Cash                                 $55,400            $35,200             $20,200

Accounts receivable (net) 83,800              88,000                -4,200

Inventory                          243,400           233,800               9,600

Prepaid expenses             25,400              24,200                1,200

Current liabilities

Accounts payable              $123,600          $140,600            ($17,000)

Taxes payable                     43,600              49,200              -5,600

Interest payable                  9,000                6,400                 2,600

Accrued liabilities                 38,800               60,400              -21,600

Note payable                       44,000              - 44,000

The accounts payable were for the purchase of goods. Prepaid expenses and accrued liabilities relate to the firm's administrative and selling expenses. The company's condensed income statement as given.

SIGN GRAPHICS INC.

Income Statement for the Year Ended 31st December, 20x5

Sales $713,800

Less: Cost of goods sold  323,000               

Gross profit   $390,800

Less: Selling & administrative expenses $186,000

Depreciation expense 17,000 

Interest expense 27,000      230,000               

Add: gain on sale of land   $160,800  21,800  

Income before taxes $182,600

Income taxes   36,800 

Net income    $145,800

Other data:

1. Long-term investments were brought for cash at a cost of $74,600.

2. Cash proceeds from the sale of land totaled $76,200.

3. Store equipment of $44,000 was brought by signing a short-term note payable. Also, a $150,000 telecommunications system was acquired by issuing 3,000 shares of preferred stock.

4. A long-term note of $49,400 was repaid.

5. Twenty thousand shares of general stock were issued at $5.19 per share.

6. The company paid cash dividends amounting to $128,600.

Instructions:

a. Create the operating activities section of the company's statement of cash flows, considering use of:

1. The indirect method.

2. The direct method.

b. Prepare the financing and investing activities sections of the statement of cash flows.

Reference no: EM134154

Questions Cloud

Business emphasizes the providing of maintenance : Business emphasizes the providing of maintenance and service for customers
Short case study report : Short case study report - A summary of the reason for and nature of the contract
Estimates of investment costs operating expenses and sales : Estimates of investment costs, operating expenses and sales
Evaluate the initially reported earnings per share : Evaluate the initially reported earnings per share for 2009. Determine the restated cash dividend per share for 2009 reported in the 2011 annual report for comparative purposes.
Prepare the financing and investing activities sections : Create the operating activities section of the company's statement of cash flows, considering use of: Prepare the financing and investing activities sections of the statement of cash flows.
Establish a new factory in the panama city : How would your answer modify if Engco sold its goods with title passing at the customer's location?
Describe statistical data on participation rates : Describe statistical data on participation rates, education and employment and income levels of individuals with disabilities
How much of engcos export gross profit : How would your answer modify if Engco sold its goods with title passing at the customer's location?
Evaluate oriole companys current income tax expense : Evaluate Oriole Company's current income tax expense. Evaluate Oriole Company's deferred income tax expense or benefit.

Reviews

Write a Review

 

Financial Accounting Questions & Answers

  Prepare the journal entries

Write the journal entries to reflect the percentage-of-completion method

  Partial income statement account balances

Prepare an amortization schedule for the Note Receivable using the subsequent columns

  Evaluate the existing ratio and quick ratio for both years

Evaluate the existing ratio and quick ratio for both years. What conclusions will you draw from these data?

  Global reporting initiative

Determine your company performance in relation to GRI standards and comment on Stigler's theory.

  Evaluating the npv for each project

Evaluate the value of a share of Turkish Air's stock.

  Estimates the value of the disney brand name

As illustrated Interbrand estimates the value of the Disney brand name in 2009 at $28.45 billion. Search Disney's financial statements and notes - what is Disney's guess of the value of the Disney name?

  Determine the contribution margin per tv

Determine the contribution margin per TV? Estimate total profit considering production and sales of 150 unties.

  Determine the estimated break-even point

Determine the estimated break-even point in annual unit sales of the new product if Martinez Company uses the: Capital-intensive manufacturing technique.

  Prepare the incentive compensation plan

Prepare the incentive compensation plan

  Explain company''s accountant to administer

Will the decision about the transfer price affect consolidated total income? Which technique would be easiest for the company's accountant to administer? As the company's accountant, what advice could you provide to these officials?

  Advantages of using the direct technique

Evaluate the relevant costs of the old machine and the new machine.

  Global reporting initiative

Compare the view espoused by the economist Milton Friedman about the social responsibilities of business with the views express by Stigler.

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