Assignment 6: Financial Acct 2

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P12-5

P12-5 (Supplement B) Preparing a Statement of Cash Flows with Gain on Sale of Equipment (Indirect Method) LO12-2, 12-4, 12-6
XS Supply Company is developing its annual financial statements at December 31, 2014. The statements are complete except for the
statement of cash flows. The completed comparative balance sheets and income statement are summarized:
		2014	2013
	Balance sheet at December 31
	Cash	$ 34,000	$ 29,000
	Accounts receivable	35,000	28,000
	Merchandise inventory	41,000	38,000
	Property and equipment	121,000	100,000
	Less: Accumulated depreciation	(30,000)	(25,000)
		$ 201,000	$ 170,000
	Accounts payable	$ 36,000	$ 27,000
	Wages payable	1,200	1,400
	Note payable, long-term	38,000	44,000
	Contributed capital	88,600	72,600
	Retained earnings	37,200	25,000
		$ 201,000	$ 170,000
	Income statement for 2014
	Sales	$ 120,000
	Gain on sale of equipment	1,000
	Cost of goods sold	70,000
	Other expenses	38,800
	Net income	$ 12,200
Additional Data:
a.	Bought equipment for cash, $31,000.
	Sold equipment with original cost of $10,000, accumulated depreciation of $7,000, for $4,000 cash.
b.	Paid $6,000 on the long-term note payable.
c.	Issued new shares of stock for $16,000 cash.
d.	No dividends were declared or paid.
e.	Other expenses included depreciation, $12,000; wages, $13,000; taxes, $6,000; and other, $7,800.
f.	Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses,
	assume that these expenses were fully paid in cash.
Required:
1	Prepare the statement of cash flows for the year ended December 31, 2014, using the indirect method.
	(List cash outflows as negative amounts.)
	Possible input areas are shaded.
	XS SUPPLY COMPANY
	Statement of Cash Flows
	For the Year Ended December 31, 2014
	Cash flows from operating activities:
	Adjustments to reconcile net income to net cash provided by operating activities:
			-
			-
	Cash flows from investing activities:
			-
	Cash flows from financing activities:
			-
			$ -

P12-5 Check Figures

P12-5 (Supplement B) Preparing a Statement of Cash Flows with Gain on Sale of Equipment (Indirect Method) LO12-2, 12-4, 12-6
XS Supply Company is developing its annual financial statements at December 31, 2014. The statements are complete except for the
statement of cash flows. The completed comparative balance sheets and income statement are summarized:
		2014	2013
	Balance sheet at December 31
	Cash	$ 34,000	$ 29,000
	Accounts receivable	35,000	28,000
	Merchandise inventory	41,000	38,000
	Property and equipment	121,000	100,000
	Less: Accumulated depreciation	(30,000)	(25,000)
		$ 201,000	$ 170,000
	Accounts payable	$ 36,000	$ 27,000
	Wages payable	1,200	1,400
	Note payable, long-term	38,000	44,000
	Contributed capital	88,600	72,600
	Retained earnings	37,200	25,000
		$ 201,000	$ 170,000
	Income statement for 2014
	Sales	$ 120,000
	Gain on sale of equipment	1,000
	Cost of goods sold	70,000
	Other expenses	38,800
	Net income	$ 12,200
Additional Data:
a.	Bought equipment for cash, $31,000.
	Sold equipment with original cost of $10,000, accumulated depreciation of $7,000, for $4,000 cash.
b.	Paid $6,000 on the long-term note payable.
c.	Issued new shares of stock for $16,000 cash.
d.	No dividends were declared or paid.
e.	Other expenses included depreciation, $12,000; wages, $13,000; taxes, $6,000; and other, $7,800.
f.	Accounts payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses,
	assume that these expenses were fully paid in cash.
Required:
1	Prepare the statement of cash flows for the year ended December 31, 2014, using the indirect method.
	(List cash outflows as negative amounts.)
	Possible input areas are shaded.
	XS SUPPLY COMPANY
	Statement of Cash Flows
	For the Year Ended December 31, 2014
	Cash flows from operating activities:
	Adjustments to reconcile net income to net cash provided by operating activities:
			-
	Net cash provided by operating activities		-
	Cash flows from investing activities:
			-
	Cash flows from financing activities:
			-
			$ -

Sheet2

List1	List2	List3	List6
Cash balance, December 31, 2014	Net income	Net cash provided by operating activities	Net increase in cash during the year
Cash balance, January 1, 2014	Net loss	Net cash used in operating activities	Net decrease in cash during the year
Cash payments on long-term note
Cash payments to purchase equipment
Cash receipts from issuing stock		List4
Cash received from sale of equipment		Net cash provided by investing activities
Decrease in accounts payable		Net cash used in investing activities
Decrease in accounts receivable
Decrease in merchandise inventory
Decrease in wages payable
Depreciation expense		List5
Gain on sale of equipment		Net cash provided by financing activities
Increase in accounts payable		Net cash used in financing activities
Increase in accounts receivable
Increase in merchandise inventory