QUESTION - EXPANDED STATEMENT OF CASH FLOWS
Financial statements for McDowell Company as well as additional information relevant to cash flows during the period are given on pages 930-931.
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McDowell Company Income Statement For Year Ended December 31, 20-2
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Net sales 1890000
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Cost of goods sold 940000
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Gross profit 950000
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Operating expenses 572300
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Operating income 377700
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Other revenues and expenses:
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Interest revenue 3900
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Interest expense (890)
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Loss on sale of store equipment (15000) (11990)
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Income before taxes 365710
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Income tax expense 133000
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Net income 232710
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McDowell Company Statement of Retained Earnings For Year Ended December 31, 20-2
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Retained earnings, January 1, 20-2 360000
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Net income 232710
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Less dividends 60000
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Net increase in retained earnings 172710
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Net increase in retained earnings 532710
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Additional information:
1. Store equipment was sold in 20-2 for $25,000. Additional information on the store equipment sold is provided below.
Cost 70000
Accumulated depreciation (30000)
Book value 40000
Market value 25000
Loss on sale 15000
2. Depreciation expense for the year was $112,000.
3. The following purchases were made for cash:
Store equipment 64000
Delivery equipment 140000
Office equipment 30,000
$234,000
4. Declared and paid cash dividends of $60,000.
5. Issued 10,000 shares of $10 par common stock for $14 per share.
6. Acquired additional store equipment by issuing a note payable for $16,000
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McDowell Company Comparative Balance Sheet December 31, 20-2 and 20-1
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Current assets:
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20-2
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20-1
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Cash
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75365
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40325
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35040
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Government notes
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6800
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18000
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(11200)
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Accrued interest receivable
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720
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610
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110
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Accounts receivable (net)
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310700
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325800
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(15100)
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Merchandise inventory
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685400
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540200
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145200
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Supplies and prepayments
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27000
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39000
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(12000)
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Total current assets
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1105985
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963935
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142050
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Property, plant, and equipment:
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Store equipment
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470000
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460000
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10000
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Less accumulated depreciation-store equipment
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18000/290000
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150000/310000
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30000
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Delivery equipment
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530000
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390000
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140000
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Less accumulated depreciation-delivery equipment
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140000/390000
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100000/290000
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40000
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Office equipment
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430000
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400000
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30000
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Less accumulated depreciation-office equipment
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88000/342000
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76000/324000
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12000
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Total property, plant, and equipment
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1022000
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924000
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98000
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Total assets
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2127985
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1887935
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240050
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Liabilities:
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Notes payable
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118000
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102000
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16000
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Accounts payable
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110000
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195000
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(85000)
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Income tax payable
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20000
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25000
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(5000)
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Accrued and withheld payroll taxes
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16400
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14900
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1500
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Accrued interest payable
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875
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1035
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(160)
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Total current liabilities
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265275
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337935
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(72660)
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Stockholders' Equity
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Common stock ($10 par, 300,000 shares authorized;
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Issued: 90,000 in 20-2 and 80,000 in 20-1)
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900000
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800000
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100000
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Paid-in capital in excess of par-common stock
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430000
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390000
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40000
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Retained earnings
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532710
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360000
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172710
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Total stockholders' equity
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1862710
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1550000
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312710
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Total liabilities and stockholders' equity
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2127985
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1887935
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240050
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REQUIRED - Prepare a statement of cash flows explaining the change in cash and cash equivalents for the year ended December 31, 20-2.
Attachment:- Assignment Files.rar