In: Accounting
The management team of Wickersham Brothers Inc. is preparing its annual financial statements. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized.
Current Year | Prior Year | ||||||||
Balance Sheet | |||||||||
Assets | |||||||||
Cash | $ | 104,100 | $ | 122,700 | |||||
Accounts receivable | 132,000 | 115,500 | |||||||
Merchandise inventory | 99,000 | 107,250 | |||||||
Property and equipment | 188,000 | 99,000 | |||||||
Less: Accumulated depreciation | (54,320 | ) | (28,000 | ) | |||||
Total assets | $ | 468,780 | $ | 416,450 | |||||
Liabilities: | |||||||||
Accounts payable | $ | 16,500 | $ | 19,800 | |||||
Salaries and Wages Payable | 3,300 | 1,650 | |||||||
Notes payable, long-term | 82,500 | 99,000 | |||||||
Stockholders’ Equity: | |||||||||
Common stock | 152,000 | 132,000 | |||||||
Retained earnings | 214,480 | 164,000 | |||||||
Total liabilities and stockholders’ equity | $ | 468,780 | $ |
416,450 |
|||||
Income Statement | |||||||||
Sales | $ | 460,000 | |||||||
Cost of goods sold | 240,000 | ||||||||
Depreciation expense | 26,320 | ||||||||
Other expenses | 115,000 | ||||||||
Net income | $ | 78,680 | |||||||
Other information from the company’s records includes the following:
Wickersham Brothers Inc. | |
Cash Flow Statement - Indirect Method | |
Cash flow from Operating Activities | |
Net Income | 78680 |
Adjustments to reconcile NI to CFOA | |
Add:- Depreciation | 26320 |
Increase in Accounts receivable ( 132000 - 115500 ) | -16500 |
Decrease in Inventory ( 99000 - 107250 ) | 8250 |
DEcrease in Accounts payable ( 16500 - 19800 ) | -3300 |
Increase in Wages payable ( 3300 - 1650 ) | 1650 |
Net Cash From Operating Activities | 95100 |
Cash flow from Investing Activities | |
Purchase of Equipment | -89000 |
Net cash used by Investing Activities | -89000 |
Cash flow from Financing Activities | |
Sale of Common stock | 20000 |
Payment of LT note payable | -16500 |
Payment of Cash Dividends | -28200 |
Net cash used by Financing Activities | -24700 |
Net increase in cash | -18600 |
Opening cash balance | 122700 |
Cosing cash Balance | 104100 |
Helping tool for | |
Cash flow from Operating Activities | |
Net loss/ Net income | |
Add:- Depreciation , amortisation , loss | |
LesS:- gain | |
Operating Profit before WC Changes | |
Add:- Decrease In Current Assets | |
Add:- Increase in current Liabilities | |
Less :-Increase In Current Assets | |
Less:- Decrease in current Liabilities | |
Net Cash From Operating Activities |