1 question for accounting
1. The comparative balance sheet of Fox Company, for the current year and the preceding year ended December 31, appears below in condensed form:
|
|
Current
Year
|
Preceding
Year
|
|
Cash
|
$ 45,000
|
$ 53,500
|
|
Accounts receivable (net)
|
51,300
|
58,000
|
|
Inventories
|
147,200
|
135,000
|
|
Investments
|
0
|
60,000
|
|
Equipment
|
493,000
|
375,000
|
|
Accumulated depreciation-equipment
|
(113,700)
|
(128,000)
|
|
|
$622,800
|
$553,500
|
|
|
========
|
========
|
|
Accounts payable
|
$ 61,500
|
$ 42,600
|
|
Bonds payable, due 2008
|
|
100,000
|
|
Common stock, $10 par
|
250,000
|
200,000
|
|
Paid-in capital in excess of par–common stock
|
75,000
|
50,000
|
|
Retained earnings
|
236,300
|
160,900
|
|
|
$622,800
|
$553,500
|
|
|
========
|
========
|
The income statement for the current year is as follows:
|
Sales
|
|
$623,000
|
|
Cost of merchandise sold
|
|
348,500
|
|
Gross profit
|
|
$274,500
|
|
Operating expenses:
|
|
|
|
Depreciation expense
|
$24,700
|
|
|
Other operating expenses
|
75,300
|
100,000
|
|
Income from operations
|
|
$174,500
|
|
Other income:
|
|
|
|
Gain on sale of investment
|
$ 5,000
|
|
|
Other expense:
|
|
|
|
Interest expense
|
12,000
|
(7,000)
|
|
Income before income tax
|
|
$167,500
|
|
Income tax
|
|
64,100
|
|
Net income
|
|
$103,400
|
|
|
|
========
|
Additional data for the current year are as follows:
|
(a)
|
Fully depreciated equipment costing $39,000 was scrapped, no salvage, and equipment was purchased for $157,000.
|
|
(b)
|
Bonds payable for $100,000 were retired by payment at their face amount.
|
|
(c)
|
5,000 shares of common stock were issued at 15 for cash.
|
|
(d)
|
Cash dividends declared and paid.
|
|
(e)
|
All sales are on account.
|
Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities.
Thanks for installing the Bottom of every post plugin by Corey Salzano. Contact me if you need custom WordPress plugins or website design.
