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| Condensed financial data of Fairchild Company for 2012 and 2011 are presented below. |
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| FAIRCHILD COMPANY |
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| COMPARATIVE BALANCE SHEET |
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| AS OF DECEMBER 31, 2012 AND 2011 |
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2012 |
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2011 |
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| Cash |
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$1,805 |
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$1,096 |
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| Receivables |
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1,741 |
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1,290 |
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| Inventory |
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1,590 |
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1,917 |
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| Plant assets |
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1,890 |
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1,693 |
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| Accumulated depreciation |
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(1,191 |
) |
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(1,170 |
) |
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| Long-term investments (held-to-maturity) |
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1,302 |
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1,474 |
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$7,137 |
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$6,300 |
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| Accounts payable |
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$1,202 |
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$799 |
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| Accrued liabilities |
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216 |
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234 |
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| Bonds payable |
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1,404 |
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1,647 |
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| Common stock |
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1,900 |
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1,701 |
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| Retained earnings |
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2,415 |
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1,919 |
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$7,137 |
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$6,300 |
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| FAIRCHILD COMPANY |
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| INCOME STATEMENT |
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| FOR THE YEAR ENDED DECEMBER 31, 2012 |
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| Sales |
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$6,818 |
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| Cost of goods sold |
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4,693 |
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| Gross margin |
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2,125 |
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| Selling and administrative expenses |
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920 |
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| Income from operations |
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1,205 |
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| Other revenues and gains |
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| Gain on sale of investments |
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92 |
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| Income before tax |
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1,297 |
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| Income tax expense |
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540 |
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| Net income |
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$757 |
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| Additional information: |
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| During the year, $74 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $261. |
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| Prepare a statement of cash flows using the direct method. (If an amount reduces the account balance then enter with negative sign.) |
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FAIRCHILD COMPANY |
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Statement of Cash Flows |
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For the Year Ended December 31, 2012 |
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(Direct Method) |
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| Cash flows from operating activities |
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| Cash collected from customers |
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| Less: Cash paid for merchandise |
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| Less: Cash paid for SG&A expenses |
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| Less: Cash paid for income taxes |
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| Net cash provided by operating activities |
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| Cash flows from investing activities |
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| Sale of held-to-maturity investments |
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| Purchase of plant assets |
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| Net cash provided by investing activities |
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| Cash flows from financing activities |
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| Issuance of capital stock |
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| Retirement of bonds payable |
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| Payment of cash dividends |
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| Net cash used by financing activities |
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| Net increase in cash |
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| Cash, January 1, 2010 |
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| Cash, December 31, 2010 |
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| Non cash Investing & Financing Activities |
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| Issurance of Common stock for Plant Assets |
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