Waterways continuing problem

Assignment Help Financial Management
Reference no: EM131079417

Waterways Continuing Problem 13 (Direct Method) Waterways prepared the balance sheet and income statement for the irrigation installation division for 2016. Now the company also needs to prepare a cash flow statement for the same division. The comparative balance sheets for Waterways Corporation’s Irrigation Installation Division for the years 2015 and 2016 and the income statement for the year 2016 are presented below. Additional information: 1. Waterways sold a company vehicle for $24,000. The vehicle had been used for 10 years. It cost $80,000 when purchased and had a 10-year life and a $6,000 salvage value. Straight-line depreciation was used. 2. Waterways purchased with cash new equipment costing $209,200. 3. Prepaid expenses increased by $33,960. WATERWAYS CORPORATION—INSTALLATION DIVISION Balance Sheets December 31 Assets 2016 2015 Current assets Cash $836,797 $746,681 Accounts receivable 680,750 542,685 Work in process 702,159 — Inventory 16,766 7,500 Prepaid expenses 76,550 42,590 Total current assets 2,313,022 1,339,456 Property, plant, and equipment Land 300,000 300,000 Buildings 450,000 450,000 Equipment 929,400 800,200 Furnishings 40,416 40,416 Accumulated depreciation (482,523 ) (485,204 ) Total property, plant, and equipment 1,237,293 1,105,412 Total assets $3,550,315 $2,444,868 Liabilities and Stockholders’ Equity Current liabilities Accounts payable $157,095 $128,360 Income taxes payable 101,344 79,989 Wages payable 4,517 1,984 Interest payable 1,187 — Other current liabilities 14,515 15,246 Revolving bank loan payable 15,000 — Total current liabilities 293,658 225,579 Long-term liabilities Note payable 140,000 — Total liabilities 433,658 225,579 Stockholders’ equity Common stock 1,250,000 1,250,000 Retained earnings 1,866,657 969,289 Total stockholders’ equity 3,116,657 2,219,289 Total liabilities and stockholders’ equity $3,550,315 $2,444,868 WATERWAYS CORPORATION—INSTALLATION DIVISION Income Statement For the Year Ending December 31, 2016 Sales $5,536,077 Less: Cost of goods sold 3,132,777 Gross profit 2,403,300 Operating expenses Advertising $50,000 Insurance 400,000 Salaries and wages 584,640 Depreciation 71,319 Other operating expenses 21,200 Total operating expenses 1,127,159 Income from operations 1,276,141 Other income Gain on sale of equipment 18,000 Other expenses Interest expense (12,187 ) Net other income and expenses 5,813 Income before income tax 1,281,954 Income tax expense 384,586 Net income $897,368 (b) Prepare a statement of cash flows using the direct method for the year 2013. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).) WATERWAYS CORPORATION—Installation Division Statement of Cash Flows—Direct Method For the Year Ending December 31, 2013 $ Less: Cash Payments $

Reference no: EM131079417

Previous Q& A

  Can someone personality change throughout their life

Essay Question:  Can someone's personality change throughout their life? In answering this question you must provide support for your argument, and this must include empirical research studies and/or reference to theoretical models of personality ..

  Lead to an increase in wealth for the bidding

Describe four ways in which a takeover may lead to an increase in wealth for the bidding company's shareholdersCopy and paste your question here...

  How the practice of nursing is expected to grow and change

Write an informal presentation (500-700 words) to educate nurses about how the practice of nursing is expected to grow and change. Include the concepts of continuity or continuum of care, accountable care organizations (ACO), medical homes, and nu..

  Opportunity cost of funds

You just won the $64 million Florida lottery, which is paid annually for 20 years ($3.2 a year). The Surely Company is offering you $30 million at once in exchange for the 20 installments on your winnings. If your opportunity cost of funds is 8%, sho..

  Decrease in price-holding all other things equal

Assume that all interest rates in the economy change from 7 percent to 8 percent. A 3, 4, or 10-year bond will have the least percentage increase or decrease in price, holding all other things equal.

  Prepare the entry to account for the acquisition

Prepare the entry to account for the acquisition of 20 percent(1500,0000 shares) of Dono Corps capital stock. March 31, 2013 Dono Corp stock is trading at $25 a share.

  How would the introduction of a new chain restaurant

Explain the difference between a change-embracing and change-fearing culture.

  Result of a decision

What do we call the most desirable alternative given up as the result of a decision?

  Will brence be better off to issue floating-rate debt

Carter Enterprises can issue floating-rate debt at LIBOR or fixed-rate debt at 9.9 percent. Brence Manufacturing can issue floating-rate debt at LIBOR + 1.5 percent or fixed-rate debt at 10.5 percent. What are the net payments of Carter and Brence if..

  Question regarding the production possiblity graph

What is the line on the production possiblity graph that shows the maximum possible output called?


Write a Review


Similar Q& A

  How many additional shares must benjamin sell to angel

Benjamin Garcia's start-up business is succeeding, but he needs $190,000 in additional funding to fund continued growth. Benjamin and an angel investor agree the business is worth $760,000 and the angel has agreed to invest the $190,000 that is neede..

  Other metrics relative to standard benchmark

Most sources report alphas and other metrics relative to a standard benchmark, such as the S&P 500. When might this method be an inappropriate comparison?

  Calculate and graph the npv of the incremental cash flows

Cutler Compacts will generate cash flows of $30,000 in year 1 and $65,000 in year 2. They are presented with a new opportunity. If they make an immediate investment of $25,500, they can expect to increase their cash flows to $66,500 in year 1 and $78..

  The five factors in establishing dividend policy

A dividend policy represents the firm’s plan of action to be followed whenever it makes a dividend decision. What are the five factors in establishing a dividend policy?

  Equity using the dividend growth model

The Devon Corporation just paid a dividend of $1.25. Its current stock price is $40. The anticipated growth rate is 12%. What is the cost of Devon's equity using the dividend growth model?

  What is the aftertax cost of debt

Jiminy’s Cricket Farm issued a bond with 25 years to maturity and a semiannual coupon rate of 12 percent 3 years ago. The bond currently sells for 94 percent of its face value. The company’s tax rate is 35 percent. What is the pretax cost of debt? Wh..

  What is your holding period return

Walgreen’s stock went from $25 to $28 last year. Walgreen’s paid a 50 cent dividend. What is your holding period return (HPR)?

  Purchased office supplies on account costing

On August 15th RJH Inc purchased office supplies on account costing 13,000. There were no additional purchases during August or September. Office supplies on hand August 1st were worth 2,500, on August 31st were worth 8,000 and on September 30th were..

  What would be annualized rate-annualized investment rate

What would be annualized rate % and your annualized investment rate % on the purchase of a 182 day treasury bill for $4,925 that pays $5000 at maturity?

  The dividends are expected to grow at a consent rate

The Jackson-Timberlake Wardrobe Co. just paid a dividend of $1.95 per share on its stock. The dividends are expected to grow at a consent rate of 4 percent per share indefinitely. If investors require a rate of return of 10.5 percent on The Jackson-T..

  Using the perpetual growth method

Suppose the dividends for the Seger Corporation over the past six years were $3.04, $3.12, $3.21, $3.29, $3.39, and $3.44, respectively. Compute the expected share price at the end of 2014 using the perpetual growth method. Assume the market risk pre..

  Initial investment in net working capital-what bid price

Romo Enterprises needs someone to supply it with 130,000 cartons of machine screws per year to support its manufacturing needs over the next five years, and you’ve decided to bid on the contract. You also need an initial investment in net working cap..

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