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In: Accounting

Using the Balance Sheet and Income Statement data below, analyze the transactions for Tolito Treats, Inc....

Using the Balance Sheet and Income Statement data below, analyze the transactions for Tolito Treats, Inc. for 2013 and 2014.

Tolito Treats, Inc.
Balance Sheets as of December 31, 2013 and 2014

2013

2014

Cash

$34,000.00

$34,500.00

Accounts Receivable, Net

$12,000.00

$17,000.00

Inventory

$16,000.00

$14,000.00

Investments (Long Term)

$6,000.00

__

Fixed Assets

$80,000.00

$93,000.00

Accumulated Depreciation

-48,000

-$39,000.00

Total Assets

$100,000.00

$119,500.00

Accounts Payable

$19,000.00

$12,000.00

Bonds Payable

$10,000.00

$30,000.00

Common Stock

$50,000.00

$61,000.00

Retained Earnings

$21,000.00

$28,000.00

Treasury Stock

__

-$11,500.00

Total Liabilities and Equity

$100,000.00

$119,500.00

Additional data for the period January 1, 2014 through December 31, 2014 are:

Sales on account, $70,000.

Purchases on account, $40,000.

Depreciation, $5,000.

Expenses paid in cash, $18,000 (including $4,000 of interest and $6,000 in taxes).

Decrease in inventory, $2,000.

Sales of fixed assets for $6,000 cash; cost $21,000 and two-thirds depreciated (loss or gain is included in income).

Purchase of fixed assets for cash, $4,000.

Fixed assets are exchanged for bonds payable of $30,000.

Sale of investments for $9,000 cash.

Purchase of treasury stock for cash, $11,500.

Retire bonds payable by issuing common stock, $10,000.

Collections on accounts receivable, $65,000.

Sold unissued common stock for cash, $1,000.

In Excel, prepare a statement of cash flows (indirect method) for the year ended December 31, 2014.

In Excel, prepare a side-by-side comparative statement contrasting two bases of reporting: (1) net income and (2) cash flows from operations.

Which of the two financial reports in (b) better reflects profitability? Explain in one paragraph in Word or using a comment box in Excel.

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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