1 question for accounting

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            1.   The comparative balance sheet of Fox Company, for the current year and the preceding year ended December 31, appears below in condensed form:

 

 

Current

Year

Preceding

Year

Cash

$ 45,000 

$ 53,500 

Accounts receivable (net)

  51,300 

 58,000

Inventories

 147,200 

135,000

Investments

       0 

 60,000

Equipment

493,000

375,000

Accumulated depreciation-equipment

(113,700)

(128,000)

 

$622,800 

$553,500 

 

======== 

======== 

Accounts payable

$ 61,500 

$ 42,600 

Bonds payable, due 2008

 

100,000

Common stock, $10 par

250,000

200,000

Paid-in capital in excess of par--common stock

 75,000

 50,000

Retained earnings

 236,300 

 160,900 

 

$622,800 

$553,500 

 

======== 

======== 

The income statement for the current year is as follows:

 

Sales

 

$623,000 

Cost of merchandise sold

 

 348,500 

Gross profit

 

$274,500 

Operating expenses:

 

 

  Depreciation expense

$24,700

 

  Other operating expenses

 75,300

 100,000 

Income from operations

 

$174,500 

Other income:

 

 

  Gain on sale of investment

$ 5,000

 

Other expense:

 

 

  Interest expense

 12,000

  (7,000)

Income before income tax

 

$167,500 

Income tax

 

  64,100 

Net income

 

$103,400 

 

 

======== 

 

Additional data for the current year are as follows:

 

(a)

Fully depreciated equipment costing $39,000 was scrapped, no salvage, and equipment was purchased for $157,000.

(b)

Bonds payable for $100,000 were retired by payment at their face amount.

(c)

5,000 shares of common stock were issued at 15 for cash.

(d)

Cash dividends declared and paid.

(e)

All sales are on account.

 

Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities.

    • 9 years ago
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