Question

In: Accounting

P23-8B (L03,6,8) (SCF—Direct and Indirect Methods) Comparative balance sheet accounts of Hamblin Company are impresented below....

P23-8B (L03,6,8) (SCF—Direct and Indirect Methods) Comparative balance sheet accounts of Hamblin Company are impresented below. Additional data: 1. Equipment that cost $20,000 and was 40% depreciated was sold in 2017. 2. Cash dividends were declared and paid during the year. 3. Common stock was issued in exchange for land. 4. Investments that cost $25,000 were sold during the year. 5. There were no write-offs of uncollectible accounts during the year. Hamblin’s 2017 income statement is as follows. Instructions (a) Compute net cash provided by operating activities under the direct method. (b) Prepare a statement of cash flows using the indirect method. HAMBLIN COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31 2017 2016 Debit Balances Cash $ 60,000 $ 71,500 Investments (available-for-sale) 30,000 55,000 Accounts receivable 152,000 136,000 Inventory 118,000 84,000 Land 50,000 15,000 Buidings 160,000 160,000 Equipment 60,000 41,500 Total assets $630,000 $563,000 Totals Credit Balances Allowance for doubtful accounts $ 6,000 $ 3,000 Accumulated depreciation-buildings 40,000 32,000 Accumulated depreciation -equipment 24,000 18,500 Accounts payable 102,000 95,000 Income taxes payable 13,000 8,000 Long-term notes payable 65,000 80,000 Common stock 295,000 236,500 Retained earnings 85,000 90,000 Totals $630,000 $563,000 Sales $750,000 Less: Cost of goods sold 480,000 Gross profi t 270,000 Less: Operating expenses (includes depreciation expense and bad debt expense) 145,000 Income from operations 125,000 Other revenues and expenses Gain on sale of investments $7,000 Loss on sale of equipment (4,000) 3,000 Income before taxes 128,000 Income taxes 52,000 Net income 76,000

Expert Solution

Cash received from customers = Sales - Increase in Accounts Receivables

Cash payments for merchandise = Cost of goods sold + Increase in Inventory - Increase in Accounts payable

Cash payments for operating expenses = Operating expenses - Depreciation expense - Bad debt

Cash payments for Income Taxes = Income Tax expense - Increase in Income Tax payable

Depreciation expense on equipment

Closing balance in accumulated depreciation + Accumulated dep on sold equipment - Opening balance in acc. depreciation

24000 + 8000 - 18500 = 13500

Depreciation expense on building

Closing balance in accumulated depreciation - Opening balance in acc. depreciation

40000 - 32000 = 8000

Common stock issued for cash = closing bal in common stock - opening bal in common stock - common stock issued against purchase of land

295000 - 236500 - 35000 = 23500

Dividends paid in cash = beg balance in retained earnings + Net Income - ending balance in ret earnings

90000 + 76000 - 85000 = 81000

Purchase of equipment = Ending balance in equipment a/c +Cost of equipment sold - Beg. Balance in equipment a/c

= 60000 + 20000 - 41500

= 38500

ekkarill92 answered 1 year ago

P23-8. (SCF—Direct and Indirect Methods) (LO 2, 4) Comparative balance sheet accounts of Sharpe Company are...

P23-8. (SCF—Direct and Indirect Methods) (LO 2, 4) Comparative balance sheet accounts of Sharpe Company are presented below. SHARPE COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31 Debit Balances 2017 2016 Cash $?70,000 $?51,000 Accounts Receivable 155,000 130,000 Inventory 75,000 61,000 Debt investments (available-for-sale) 55,000 85,000 Equipment 70,000 48,000 Buildings 145,000 145,000 Land ??40,000 ??25,000 Totals $610,000 $545,000 Credit Balances Allowance for Doubtful Accounts $?10,000 $??8,000 Accumulated Depreciation—Equipment 21,000 14,000 Accumulated Depreciation—Buildings 37,000 28,000 Accounts Payable 66,000 60,000 Income...

Comparative balance sheet accounts of Splish Company are presented below. SPLISH COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS...

Comparative balance sheet accounts of Splish Company are presented below. SPLISH COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31 Debit Balances 2020 2019 Cash $70,600 $50,500 Accounts Receivable 155,100 130,000 Inventory 75,600 61,100 Debt investments (available-for-sale) 55,100 84,300 Equipment 70,300 48,400 Buildings 144,400 144,400 Land 39,600 25,300 Totals $610,700 $544,000 Credit Balances Allowance for Doubtful Accounts $10,000 $7,900 Accumulated Depreciation—Equipment 21,000 14,100 Accumulated Depreciation—Buildings 37,300 28,200 Accounts Payable 66,400 60,600 Income Taxes Payable 11,900 9,900 Long-Term Notes Payable 62,000...

Comparative balance sheet accounts of Carla Company are presented below. CARLA COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS...

Comparative balance sheet accounts of Carla Company are presented below. CARLA COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31 Debit Balances 2020 2019 Cash $69,900 $50,600 Accounts Receivable 154,800 130,300 Inventory 75,700 61,400 Debt investments (available-for-sale) 55,100 84,600 Equipment 69,300 48,400 Buildings 145,700 145,700 Land 40,200 25,200 Totals $610,700 $546,200 Credit Balances Allowance for Doubtful Accounts $10,100 $7,900 Accumulated Depreciation—Equipment 21,000 14,000 Accumulated Depreciation—Buildings 36,800 28,100 Accounts Payable 65,600 59,500 Income Taxes Payable 12,000 10,100 Long-Term Notes Payable 62,000...

Comparative balance sheet accounts of Sweet Company are presented below. SWEET COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS...

Comparative balance sheet accounts of Sweet Company are presented below. SWEET COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31 Debit Balances 2020 2019 Cash $69,600 $51,100 Accounts Receivable 156,500 130,000 Inventory 75,700 60,800 Debt investments (available-for-sale) 55,000 85,300 Equipment 69,600 47,800 Buildings 144,900 144,900 Land 39,600 25,200 Totals $610,900 $545,100 Credit Balances Allowance for Doubtful Accounts $10,000 $8,000 Accumulated Depreciation—Equipment 20,800 14,100 Accumulated Depreciation—Buildings 37,000 27,900 Accounts Payable 66,500 59,800 Income Taxes Payable 11,900 10,000 Long-Term Notes Payable 62,000...

Comparative balance sheet accounts of Pina Company are presented below. PINA COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS...

Comparative balance sheet accounts of Pina Company are presented below. PINA COMPANY COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31 Debit Balances 2017 2016 Cash $69,500 $50,900 Accounts Receivable 153,400 131,000 Inventory 75,300 60,900 Debt investments (available-for-sale) 54,800 85,600 Equipment 70,300 48,300 Buildings 143,900 143,900 Land 40,000 24,900 Totals $607,200 $545,500 Credit Balances Allowance for Doubtful Accounts $10,100 $7,900 Accumulated Depreciation—Equipment 20,800 14,000 Accumulated Depreciation—Buildings 36,900 27,700 Accounts Payable 66,500 59,600 Income Taxes Payable 11,900 10,100 Long-Term Notes Payable 62,000...

P23.7 (LO 2, 3, 4 ) (SCF—Direct and Indirect Methods from Comparative Financial Statements) Chapman Company,...

P23.7 (LO 2, 3, 4 ) (SCF—Direct and Indirect Methods from Comparative Financial Statements) Chapman Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Chapman as of May 31, 2020, are as follows. The company is preparing its statement of cash flows. Chapman Company Comparative Balance Sheet As of May 31 2020 2019 Current assets Cash $ 28,250 $ 20,000 Accounts receivable 75,000 58,000...

Comparative balance sheet accounts of Oriole Inc. are presented below. ORIOLE INC. COMPARATIVE BALANCE SHEET ACCOUNTS...

Comparative balance sheet accounts of Oriole Inc. are presented below. ORIOLE INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2020 AND 2019 December 31 Debit Accounts 2020 2019 Cash $42,200 $33,700 Accounts Receivable 70,800 60,200 Inventory 30,000 24,300 Equity investments 22,400 38,300 Machinery 30,100 18,800 Buildings 67,000 56,100 Land 7,500 7,500 $270,000 $238,900 Credit Accounts Allowance for Doubtful Accounts $2,200 $1,500 Accumulated Depreciation—Machinery 5,700 2,300 Accumulated Depreciation—Buildings 13,600 9,000 Accounts Payable 35,100 24,700 Accrued Payables 3,300 2,600 Long-Term Notes...

Comparative balance sheet accounts of Kingbird Inc. are presented below. KINGBIRD INC. COMPARATIVE BALANCE SHEET ACCOUNTS...

Comparative balance sheet accounts of Kingbird Inc. are presented below. KINGBIRD INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2020 AND 2019 December 31 Debit Accounts 2020 2019 Cash $42,200 $33,900 Accounts Receivable 71,100 59,600 Inventory 30,000 23,800 Equity investments 22,400 38,400 Machinery 30,200 18,600 Buildings 67,000 56,000 Land 7,500 7,500 $270,400 $237,800 Credit Accounts Allowance for Doubtful Accounts $2,300 $1,600 Accumulated Depreciation—Machinery 5,600 2,200 Accumulated Depreciation—Buildings 13,400 9,100 Accounts Payable 34,800 24,600 Accrued Payables 3,400 2,600 Long-Term Notes...

Comparative balance sheet accounts of Whispering Inc. are presented below. WHISPERING INC. COMPARATIVE BALANCE SHEET ACCOUNTS...

Comparative balance sheet accounts of Whispering Inc. are presented below. WHISPERING INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash $42,400 $33,500 Accounts Receivable 70,200 59,800 Inventory 29,700 24,100 Equity investments 22,500 38,100 Machinery 30,100 18,900 Buildings 67,000 55,700 Land 7,400 7,400 $269,300 $237,500 Credit Accounts Allowance for Doubtful Accounts $2,200 $1,600 Accumulated Depreciation—Machinery 5,600 2,200 Accumulated Depreciation—Buildings 13,600 9,000 Accounts Payable 35,300 24,600 Accrued Payables 3,400 2,600 Long-Term Notes...

Comparative balance sheet accounts of Larkspur Inc. are presented below. LARKSPUR INC. COMPARATIVE BALANCE SHEET ACCOUNTS...

Comparative balance sheet accounts of Larkspur Inc. are presented below. LARKSPUR INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash $42,300 $33,500 Accounts Receivable 70,600 59,900 Inventory 30,300 24,000 Equity investments 22,300 38,200 Machinery 29,900 18,700 Buildings 67,300 56,200 Land 7,600 7,600 $270,300 $238,100 Credit Accounts Allowance for Doubtful Accounts $2,300 $1,500 Accumulated Depreciation—Machinery 5,700 2,300 Accumulated Depreciation—Buildings 13,600 9,100 Accounts Payable 35,000 24,800 Accrued Payables 3,400 2,600 Long-Term Notes...