Texts: Prepare a statement of cash flows using the indirect method. Show supplementary calculations in T-accounts or properly labeled calculations.
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Applet Inc.
Income Statement Year ended year 2
Prepare a statement of cash flows in proper format using the indirect method for Applet Inc.'s second year of operation. Show T-account to support your calculations. The following information is provided as a supplement to the financial statements.
1. The company sold equipment for $8,000. The original cost was $15,000 and the depreciation was $10,000.
2. There were no new bonds issued during the year.
3. The company did not repurchase any of its own stock during the year.
Sales $3,638,000
COGS $2,469,000
Gross Profit $1,169,000
7 Selling and Administrative Expenses $941,000
8 Income from operations $228,000
6 Other gains and revenues:
10 Gain on sale of equipment $3,000
11 Income before taxes $231,000
12 Income tax expense $91,000
13 Net Income $140,000
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15 Applet Inc.
16 Balance Sheet
17 Years 2 & 1
18 Year 2 Year 1
19 Assets
20 Current Assets:
21 Cash and cash equivalents $91,000 $29,000
22 Accounts Receivable $637,000 $654,000
23 Inventory $586,000 $537,000
24 Total current assets $1,314,000 $1,220,000
25 Plant, property, & equipment $1,517,000 $1,394,000
26 Less accumulated depreciation $654,000 $561,000
27 Net plant, property, & equipment $863,000 $833,000
28 Total Assets $2,177,000 $2,053,000
29 Liabilities
30 Current Liabilities
31 Accounts payable $264,000 $220,000
32 Accrued liabilities $193,000 $190,000
33 Income taxes payable $75,000 $71,000
34 Total current liabilities $532,000 $481,000
35 Bonds Payable $479,000 $520,000
36 Total Liabilities $1,011,000 $1,001,000
37 Stockholders' Equity
38 Common Stock $157,000 $155,000
39 Retained Earnings $1,009,000 $897,000
40 Total stockholders' equity $1,166,000 $1,052,000
41 Total Liabilities & Stockholders' Equity $2,177,000 $2,053,000
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