Question
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Comparative balance sheets and the income statements for Ellis Corporation are presented below: Comparative Balance Sheet...
Comparative balance sheets and the income statements for Ellis Corporation are presented below:
| Comparative Balance Sheet | ||||||
| Ending Balance | Beginning Balance | |||||
| Assets: | ||||||
| Current assets: | ||||||
| Cash and cash equivalents | $ | 48,600 | $ | 33,000 | ||
| Accounts receivable | 39,900 | 43,200 | ||||
| Inventory | 71,000 | 61,200 | ||||
| Total current assets | 159,500 | 137,400 | ||||
| Long-term investments | 168,500 | 220,000 | ||||
| Property, plant, and equipment | 286,300 | 159,000 | ||||
| Less accumulated depreciation | 53,000 | 52,500 | ||||
| Total assets | $ | 561,300 | $ | 463,900 | ||
| Liabilities and stockholders' equity: | ||||||
| Current liabilities: | ||||||
| Accounts payable | $ | 38,500 | $ | 42,800 | ||
| Accrued liabilities | 25,000 | 31,800 | ||||
| Income taxes payable | 15,500 | 21,000 | ||||
| Total current liabilities | 79,000 | 95,600 | ||||
| Bonds payable | 127,200 | 32,400 | ||||
| Total liabilities | 206,200 | 128,000 | ||||
| Stockholders’ equity: | ||||||
| Common stock | 309,800 | 286,200 | ||||
| Retained earnings | 45,300 | 49,700 | ||||
| Total stockholders' equity | 355,100 | 335,900 | ||||
| Total liabilities and stockholders' equity | $ | 561,300 | $ | 463,900 | ||
| Income Statement | ||
| Sales | $ | 156,000 |
| Cost of goods sold | 81,100 | |
| Gross margin | 74,900 | |
| Selling and administrative expense | 17,100 | |
| Net operating income | 57,800 | |
| Loss on sale of investment | 2,500 | |
| Income before taxes | 55,300 | |
| Income taxes | 23,300 | |
| Net income | $ | 32,000 |
The following additional information is available for the year:
* During the year, the company sold long-term investments for $49,000 that had been purchased for $51,500.
* The company did not sell any property, plant, and equipment during the year or repurchase any of its own common stock.
* All sales were on credit.
* The company paid a cash dividend of $36,400.
* The company paid cash to retire $15,900 of bonds payable.
Required:
a. Using the indirect method, determine the net cash provided by (used in) operating activities.
b. Using the direct method, determine the net cash provided by (used in) operating activities.
c. Using the net cash provided by (used in) operating activities amount from either part a or b, prepare a statement of cash flows.
Solutions
Expert Solution
| a) Cash flow statement: Indirect Method | ||
| Cash flows from operating activities: | Working | Amount $ |
| Profit before tax | $ 55,300.00 | |
| Adjustments: | ||
| Depreciation | $ 500.00 | |
| Loss on sale of equipment | $ 2,500.00 | |
| Operating profit from before working capital changes | $ 58,300.00 | |
| Accounts receivable (increase)/decrease | $ 3,300.00 | |
| inventory (increase)/decrease | $ (9,800.00) | |
| Account payable (decrease)/increase | $ (4,300.00) | |
| Accrued liab (decrease)/increase | $ (6,800.00) | |
| Cash generation from operation | $ 40,700.00 | |
| Income tax paid | $ (28,800.00) | |
| Net cash provided by operating activities | $ 11,900.00 | |
| Cash flows from investing activities: | ||
| Net proceeds/(Purchase) of Investment | $ 49,000.00 | |
| Net proceeds/(Purchase) of plant & equipment | $ (127,300.00) | |
| Net proceeds/(Purchase) of plant & equipment | $ - | |
| Net cash used in investing activities | $ (78,300.00) | |
| Cash flows from financing activities: | ||
| Net proceeds/(Repayment))of Issue of Common stock | $ 23,600.00 | |
| Net proceeds/(Repayment))of Bond payable | $ 110,700.00 | |
| Net proceeds/(Repayment))of Bond payable | $ (15,900.00) | |
| Dividend paid | $ (36,400.00) | |
| Net cash provided by financing activities | $ 82,000.00 | |
| Net increase in cash | $ 15,600.00 | |
| Opening Cash balance, | $ 33,000.00 | |
| Closing Cash balance, | $ 48,600.00 | |
| b) Cashflow from Operating activities under Direct Method | ||
| Cash collection from account receivable | $ 159,300.00 | |
| Cash paid to account payable | $ (95,200.00) | |
| Cash paid for operating expense | $ (23,400.00) | |
| Income tax paid | $ (28,800.00) | |
| Net cash provided by operating activities | $ 11,900.00 | $ - |
| Please do upvote if you found the answer useful. | ||
| Feel free reach in the comment section in case of any clarification or queries. | ||
| Ledger Working | |||||
| Retained earnign | |||||
| Opening balance | $ 49,700.00 | ||||
| Divident paid | $ 36,400.00 | Net income | $ 32,000.00 | ||
| Closing balance | $ 45,300.00 | ||||
| $ 81,700.00 | $ 81,700.00 | ||||
| Bond paayable | |||||
| Repayment | $ 15,900.00 | Opening balance | $ 32,400.00 | ||
| Closing balance | $ 127,200.00 | Proceeds | $ 110,700.00 | ||
| $ 143,100.00 | $ 143,100.00 | ||||
| Equipment | |||||
| Opening balance | $ 159,000.00 | ||||
| Addition Plant assets | $ 127,300.00 | Sale of asset | |||
| Closing balance | $ 286,300.00 | ||||
| $ 286,300.00 | $ 286,300.00 | ||||
| Accumulated depreciation | |||||
| Opening balance | $ 52,500.00 | ||||
| Sale of asset | $ - | P&L | $ 500.00 | ||
| Closing balance | $ 53,000.00 | ||||
| $ 53,000.00 | $ 53,000.00 |
| Account receivable | |||||
| Opening balance | $ 43,200.00 | ||||
| Sales | $ 156,000.00 | Cash collection | $ 159,300.00 | ||
| Closing balance | $ 39,900.00 | ||||
| $ 199,200.00 | $ 199,200.00 | ||||
| Account payable |
 ekkarill92 answered 1 year agoRelated SolutionsComparative balance sheets and the income statements for Ellis Corporation are presented below: Comparative Balance Sheet...Comparative balance sheets and the income statements for Ellis
Corporation are presented below:
Comparative Balance Sheet
Ending Balance
Beginning Balance
Assets:
Current assets:
Cash and cash equivalents
$
45,900
$
30,600
Accounts receivable
39,500
40,800
Inventory
73,700
62,400
Total current assets
159,100
133,800
Long-term investments
165,200
208,000
Property, plant, and equipment
294,700
163,500
Less accumulated depreciation
53,000
51,500
Total assets
$
566,000
$
453,800
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable
$
39,600
$
43,200
Accrued liabilities
25,700
30,600...
Comparative balance sheets and the income statements for Ellis Corporation are presented below: Comparative Balance Sheet...Comparative balance sheets and the income statements for Ellis
Corporation are presented below:
Comparative Balance Sheet
Ending Balance
Beginning Balance
Assets:
Current assets:
Cash and cash equivalents
$
49,500
$
30,600
Accounts receivable
39,100
43,600
Inventory
71,000
63,000
Total current assets
159,600
137,200
Long-term investments
176,600
208,000
Property, plant, and equipment
303,000
165,000
Less accumulated depreciation
57,200
51,000
Total assets
$
582,000
$
459,200
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable
$
38,200
$
42,400
Accrued liabilities
25,400
30,600...
128. Comparative balance sheets and the income statements for Ellis Corporation are presented below: Comparative Balance...128. Comparative balance sheets and the income statements for
Ellis Corporation are presented below:
Comparative Balance Sheet
Ending Balance
Beginning Balance
Assets:
Current assets:
Cash and cash equivalents
$
45,900
$
31,500
Accounts receivable
39,900
42,800
Inventory
71,000
62,400
Total current assets
156,800
136,700
Long-term investments
176,600
212,000
Property, plant, and equipment
286,300
162,000
Less accumulated depreciation
57,200
53,500
Total assets
$
562,500
$
457,200
Liabilities and stockholders' equity:
Current liabilities:
Accounts payable
$
38,200
$
42,800
Accrued liabilities
25,400...
A comparative balance sheet for Party Corporation is presented below. Party Corporation Comparative Balance Sheets 31-Dec...A comparative balance sheet for Party Corporation is presented
below.
Party Corporation
Comparative Balance Sheets
31-Dec
2019
2018
Cash
$18,700
$22,700
Accounts receivable
$24,700
$22,300
Investments
$25,000
$16,000
Equipment
$59,000
$70,000
Accumulated depreciation
($14,500)
($10,000)
Total
$112,900
$121,000
Accounts payable
$13,600
$11,100
Bonds payable
$6,000
$30,000
Common stock
$50,000
$45,000
Retained earnings
$43,300
$34,900
Total
$112,900
$121,000
Additional information:
1. Net income for 2019
was $17,700; Dividends declared and paid were $9,300.
2. Equipment which
cost $11,000 and...
A comparative balance sheet for Party Corporation is presented below. Party Corporation Comparative Balance Sheets 31-Dec...A comparative balance sheet for Party Corporation is presented
below.
Party Corporation
Comparative Balance Sheets
31-Dec
2019
2018
Cash
$18,700
$22,700
Accounts receivable
$24,700
$22,300
Investments
$25,000
$16,000
Equipment
$59,000
$70,000
Accumulated depreciation
($14,500)
($10,000)
Total
$112,900
$121,000
Accounts payable
$13,600
$11,100
Bonds payable
$6,000
$30,000
Common stock
$50,000
$45,000
Retained earnings
$43,300
$34,900
Total
$112,900
$121,000
Additional information:
1. Net income for 2019
was $17,700; Dividends declared and paid were $9,300.
2. Equipment which
cost $11,000 and...
A comparative balance sheet for the Stanley Corporation is presented below: Corporation Comparative Balance Sheet 2019...
A comparative balance sheet for the Stanley Corporation is
presented below:
Corporation
Comparative Balance Sheet
2019
2018
Assets
Cash
$ 37,000
$ 31,000
Accounts receivable (net)
80,000
60,000
Prepaid insurance
22,000
17,000
Land
18,000
40,000
Equipment
70,000
60,000
Accumulated depreciation
(20,000)
(13,000)
Total Assets
$207,000
$195,000
Liabilities and Stockholders' Equity
Accounts payable
$ 12,000
$ 6,000
Bonds payable
27,000
19,000
Common stock
140,000
115,000
Retained earnings
28,000
55,000
Total liabilities and stockholders' equity
$207,000
$195,000
Additional information:
1. Net loss for
2019 is $12,000. Depreciation...
Newman Corporation's comparative balance sheets are presented below. Newman Corporation Comparative Balance Sheet December 31 Assets...Newman Corporation's comparative balance sheets are presented
below. Newman Corporation Comparative Balance Sheet December 31
Assets 2020 2019 Cash $15,200 $17,700 Accounts receivable 25,200
22,300 Investments (long-term) 20,000 16,000 Equipment 60,000
70,000 Accumulated depreciation (14,000) (10,000) Total Assets
$106,400 $116,000 Liabilities & Stockholder Equity Accounts
payable $14,600 $11,100 Bonds payable 10,000 30,000 Common stock
($1 par) 50,000 45,000 Retained earnings 31,800 29,900 Total
Liabilities & Stockholder Equity $106,400 $116,000 Additional
information: 1. Net income was $18,300. Dividends declared and paid...
. A comparative balance sheet for the Rivera Corporation is presented below: Rivera Corporation Comparative Balance.... A comparative balance sheet for the Rivera
Corporation is presented below:
Rivera Corporation
Comparative Balance Sheet
2016 2015
Assets
Cash $ 25,000 $33,000
Accounts receivable
(net) 23,000 14,000
Merchandise
Inventory 41,000 25,000
Equipment 73,000 78,000
Accumulated
Depreciation (27,000) 46,000 (24,000) 54,000
Total
Assets $135,000 $126,000
Liabilities
and Stockholders' Equity
Accounts
payable $ 23,000 $
43,000
Income Tax
Payable 26,000 20,000
Bonds
payable 20,000 10,000
Common
stock 25,000 25,000
Retained
earnings 41,000 28,000
Total liabilities/Stockholders' Equity
$135,000 $126,000
Additional information:
1. Net Income for 2016 is $38,000. Net sales for
2016 are $286,000.
2. Cash dividends of $25,000 were declared and paid
in 2016
3. During the year,...
The comparative condensed balance sheets of Gurley Corporation are presented below. GURLEY CORPORATION Comparative Condensed Balance...The comparative condensed balance sheets of Gurley Corporation
are presented below.
GURLEY CORPORATION
Comparative Condensed Balance Sheets
December 31
2017
2016
Assets
Current assets
$ 73,800
$ 79,400
Property, plant, and equipment (net)
97,100
91,200
Intangibles
27,400
40,200
Total assets
$198,300
$210,800
Liabilities and stockholders’
equity
Current liabilities
$ 40,400
$ 49,200
Long-term liabilities
143,200
148,000
Stockholders’ equity
14,700
13,600
Total liabilities and
stockholders’ equity
$198,300
$210,800
b)
Prepare a vertical analysis of the balance sheet data for Gurley
Corporation...
An incomplete income statement and an incomplete comparative balance sheet of Deines Corporation are presented below....An incomplete income statement and an incomplete comparative
balance sheet of Deines Corporation are presented below.
Additional information:
1.
The accounts receivable
turnover for 2017 is 10 times.
2.
All sales are on
account.
3.
The profit margin for 2017 is
14.5%.
4.
Return on assets is 22% for
2017.
5.
The current ratio on December
31, 2017, is 3.0.
6.
The inventory turnover for
2017 is 4.8 times.
Compute the missing information given the ratios above.
DEINES CORPORATION
Income...
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