Intermediate Accounting II
Intermediate Accounting II – Professor Iskander
Chapter 21 – Statement of Cash Flows Revisited
Exercise 21-15 Preparing a Complete Statement of Cash Flows
Sunnyvale Corporation prepared the following balance sheet data for 2013 and 2012: Dec. 31, 2013 Dec. 31, 2012
Cash and cash equivalents . . . . . . . . . . $ 518,500 $ 675,000
Accounts receivable . . . . . . . . . . . . . . . . 360,000 345,000
Merchandise inventory . . . . . . . . . . . . 750,000 654,000
Prepaid insurance . . . . . . . . . . . . . . 4,500 6,000
Buildings and equipment . . . . . . . . . 5,515,500 4,350,000
Accumulated depreciation—. buildings and equipment . . . . . . . . . . . (2,235,000) (1,995,000) Total assets . . . . . . . . . . $ 4,913,500 $ 4,035,000
Accounts payable . . . . . . . . . . $ 613,500 $ 945,000
Salaries payable. . . . . . . . 75,000 105,000
Notes payable—bank (current) . . . . . . . . .150, 000 600,000
Notes payable—bank (long-term) . . . . . 1,500,000 —
Common stock . . . . . . . . . . . . . . . . . . 2,400,000 2,400,000
Retained earnings (deficit) . . . . . . . . .. 175,000 (15,000)
Total liabilities and stockholders’ equity ……………….. $ 4,913,500 $ 4,035,000
Cash needed to purchase new equipment and to improve the company’s working capital position was raised by borrowing from the bank with a long-term note. Equipment costing $75,000 with a book value of $15,000 was sold for $18,000; the gain on the sale was included in net income. The company paid cash dividends of $90,000 and reported earnings of $280,000 for 2013. There were no entries in the retained earnings account other than to record the dividends and net income for the year.
Prepare a statement of cash flows for 2013 using the indirect method.
Sunnyvale
Chapter 21 – Statement of Cash Flows Revisited
Exercise 21-15 Preparing a Complete Statement of Cash Flows
Sunnyvale Corporation prepared the following balance sheet data for 2013 and 2012: Dec. 31, 2013 Dec. 31, 2012
Cash and cash equivalents . . . . . . . . . . $ 518,500 $ 675,000
Accounts receivable . . . . . . . . . . . . . . . . 360,000 345,000
Merchandise inventory . . . . . . . . . . . . 750,000 654,000
Prepaid insurance . . . . . . . . . . . . . . 4,500 6,000
Buildings and equipment . . . . . . . . . 5,515,500 4,350,000
Accumulated depreciation—. buildings and equipment . . . . . . . . . . . (2,235,000) (1,995,000) Total assets . . . . . . . . . . $ 4,913,500 $ 4,035,000
Accounts payable . . . . . . . . . . $ 613,500 $ 945,000
Salaries payable. . . . . . . . 75,000 105,000
Notes payable—bank (current) . . . . . . . . .150, 000 600,000
Notes payable—bank (long-term) . . . . . 1,500,000 —
Common stock . . . . . . . . . . . . . . . . . . 2,400,000 2,400,000
Retained earnings (deficit) . . . . . . . . .. 175,000 (15,000)
Total liabilities and stockholders’ equity ……………….. $ 4,913,500 $ 4,035,000
Cash needed to purchase new equipment and to improve the company’s working capital position was raised by borrowing from the bank with a long-term note. Equipment costing $75,000 with a book value of $15,000 was sold for $18,000; the gain on the sale was included in net income. The company paid cash dividends of $90,000 and reported earnings of $280,000 for 2013. There were no entries in the retained earnings account other than to record the dividends and net income for the year.
Prepare a statement of cash flows for 2013 using the indirect method.
Sunnyvale