Compare The Two Years To Create A Cash Flow Statement (cpa’s)?

Spurs Champions, Inc.
Comparative Balance Sheet
December 31, 2X12 and 2X11
Assets 2X12 2X11
Cash $46,250.00 $89,250.00
Accounts Receivable (Net) $72,000.00 $66,700.00
Merchandise Inventory $22,400.00 $32,000.00
Prepaid Advertising $8,000.00 $7,500.00
Land $40,000.00 $40,000.00
Property, Plant and Equipment $185,000.00 $160,000.00
Less: Accumulated Depreciation ($34,000.00) ($24,000.00…
Total Assets $339,650.00 $371,450.00
Liabilities and Stockholder’s Equity
Liabilities
Notes Payable $45,000.00 $50,000.00
Accounts Payable $32,500.00 $62,500.00
Income Taxes Payable $5,000.00 $10,000.00
Bonds Payable $0.00 $100,000.00
Total Liabilities $82,500.00 $222,500.00
Stockholder’s Equity
Common Stock $150,000.00 $100,000.00
Retained Earnings $107,150.00 $48,950.00
Total Stockholder’s Equity $257,150.00 $148,950.00
Total Liabilities and Stockholder’s Equity $339,650.00 $371,450.00
Spurs Champions, Inc.
Condensed Income Statement
Year Ended December 31, 2X12
Revenues $598,200.00
Costs and Expenses
Cost of Goods Sold $295,000.00
Depreciation Expense 18,000.00
Selling and Administrative Expenses 175,000.00
Interest Expense 15,000.00
Loss on Sale of Equipment 2,000.00
Income Tax Expense 15,000.00
Total Cost and Expenses $520,000.00
Net Income After Income Tax $78,200.00
INSTRUCTIONS:
Prepare a statement of cash flows for 2X12. Additional information for 2X12 follows.
a. Sold used equipment for $22,000 in cash. The original cost was $32,000; depreciation of $8,000 had been taken. The remaining change in Equipment represents a purchase of equipment for cash.
b. Issued notes payable at par value of $15,000. Certain other notes were paid off during the year. Retired bonds payable at maturity.
c. Paid cash dividends of $20,000.
d. Issued common stock at par for cash.
Email at gocanes246@yahoo.com if you would like word document. this is comparing two years, create a cash flow statement w corrections.
Lets see who can still remember how todo this CPA’s

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One Response to “Compare The Two Years To Create A Cash Flow Statement (cpa’s)?”

  1. JKRB says:

    Operating activities
    78,200 net income
    + 18,000 depreciation
    + 2,000 loss on sale of equipment
    + 15,000 issuance of notes payable
    – 20,000 paid off notes payable
    – 5,300 increase in A/R
    + 9,600 decrease in inventory
    – 500 increase in prepaid advertising
    – 30,000 decrease in A/P
    – 5,000 decrease in income tax payable
    = $62,000 cash flow from operating activities
    Investing activities
    22,000 sale of equipment
    – 57,000 purchase of equipment
    = (35,000) negative cash flow from investing activities
    Financing activities
    50,000 issue common stock
    – 20,000 paid dividends
    – 100,000 paid off bonds payable
    = (70,000) negative cash flow from financing activities
    62,000 cash flow from operating activities
    – 35,000 cash flow from investing activities
    – 70,000 cash flow from financing activities
    = -$43,000 total cash flow
    + 89,250 beginning cash balance
    = $46,250 ending cash balance

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