For the year ending August 31, 2011, Gymboree Systems Inc. reported net income of $90,600 and paid
Question:
For the year ending August 31, 2011, Gymboree Systems Inc. reported net income of $90,600 and paid dividends of $27,000. Comparative balance sheets as of August 31, 2011 and 2010, are as follows:
Instructions1. Prepare a statement of cash flows, using the indirect method.2. Why is depreciation added to net income in determining net cash flows from operating activities?Explain.
Transcribed Image Text:
GYMBOREE SYSTEMS INC. Balance Sheets August 31, Changes Increase (Decrease) 2010 2011 Assets Current assets: $ 79,425 $ 62,250 Cash $17,175 Accounts receivable 114,120 78,000 89,550 36,120 Merchandise inventory Office supplies Prepaid insurance 93,225 3,675 (180) (525) $56,265 720 900 3,975 $ 291,465 4,500 Total current assets $235,200 Property, plant, and equipment: Land $ 30,000 $ 30,000 Store equipment Accumulated depreciation-store equipment Office equipment Accumulated depreciation-office equipment Total property, plant, and equipment 10,650 (4,650) 40,650 30,000 (3,900) (8,550) 23,355 (7,080) 15,000 (3,345) 8,355 (3,735) $ 67,755 $302,955 $ 78,375 $ 369,840 $10,620 Total assets $66,885 Liabilities Current liabilities: $ 33,630 $ 21,405 7,500 Accounts payable Notes payable (current portion) Salaries payable Unearned rent $12,225 7,500 1,710 2,700 (540) (900) 2,250 3,600 $ 34,755 $ 45,540 Total current liabilities $10,785 Long-term liabilities: Notes payable (final payment due 2015) 30,000 $ 75,540 37,500 S 72,255 (7,500) $ 3,285 Total liabilities Stockholders' Equity $ 37,500 $ 37,500 193,200 $230,700 Capital stock Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 63,600 $63,600 256,800 $ 294,300 $ 369,840 $302,955 $66,885
Fantastic news! We've Found the answer you've been seeking!
Step by Step Answer:
Answer rating: 72% (11 reviews)
1 2 Depreciation is added to net income in determining net cash flows from operating activities beca...View the full answer
Answered By
Asim farooq
I have done MS finance and expertise in the field of Accounting, finance, cost accounting, security analysis and portfolio management and management, MS office is at my fingertips, I want my client to take advantage of my practical knowledge. I have been mentoring my client on a freelancer website from last two years, Currently I am working in Telecom company as a financial analyst and before that working as an accountant with Pepsi for one year. I also join a nonprofit organization as a finance assistant to my job duties are making payment to client after tax calculation, I have started my professional career from teaching I was teaching to a master's level student for two years in the evening.
My Expert Service
Financial accounting, Financial management, Cost accounting, Human resource management, Business communication and report writing. Financial accounting : • Journal entries • Financial statements including balance sheet, Profit & Loss account, Cash flow statement • Adjustment entries • Ratio analysis • Accounting concepts • Single entry accounting • Double entry accounting • Bills of exchange • Bank reconciliation statements Cost accounting : • Budgeting • Job order costing • Process costing • Cost of goods sold Financial management : • Capital budgeting • Net Present Value (NPV) • Internal Rate of Return (IRR) • Payback period • Discounted cash flows • Financial analysis • Capital assets pricing model • Simple interest, Compound interest & annuities
4.40+
65+ Reviews
86+ Question Solved
Related Book For
Question Posted:
Students also viewed these Accounting questions
-
Prepare a statement of cash lows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the...
-
Prepare a statement of cash flows using the indirect method. The income statement for 2017 and the balance sheets for 2017 and 2016 are presented for Harding Industries, Inc. Additional information...
-
Prepare a statement of cash flows using the indirect method for the ABC Co for the year 2012. ABC Co. Balance Sheet 1/1/2012 12/31/2012 Increase/(Decrease) Cash 700,000 840,000 140,000 Marketable...
-
Consider the heat pump described in Example 9.14. The heat pump now operates between 0.60 MPa and 1.4 MPa. Plot the vapor-compression cycle in Ts coordinates (use NIST) and determine the cycle...
-
The Filling Department of Eve Cosmetics Company had 4,000 ounces in beginning work in process inventory (60% complete). During the period, 46,000 ounces were completed. The ending work in process...
-
Blogs have emerged as a new type of online media since our textbook was published. What is a blog? What is the difference between a personal blog and a business blog? Describe how blogs might have an...
-
An observatory has a telescope that requires an initial investment of $\$ 25,000$. A benefactor will provide a $\$ 7,500$ gift every 5 years as long as the university makes the telescope available to...
-
Doorway Diffraction Sound of frequency 1250Hz leaves a room through a 1.0 D-m-wide doorway (see Exercise 36.5). At which angles relative to the centerline perpendicular to the doorway will someone...
-
A projectile is launched with initial velocity v =25.7 m/s at an angle 0 = 21.5. What is the height (in meters) of the projectile's apex (the highest point along its trajectory)?
-
Revlon hired Logisticon to install a real-time invoice and inventory processing system. Seven months later, when the system crashed, Revlon blamed the Logisticon programming bugs they discovered and...
-
The following selected transactions were completed during June between Shapiro Company and Bacarti Company: June 8. Shapiro Company sold merchandise on account to Bacarti Company, $24,000, terms FOB...
-
On February 15, 2010, Tropical Connection Company, a garden retailer, purchased $25,000 of seed, terms 2/10, n/30, from Midwest Seed Co. Even though the discount period had expired, Lydia DeLay...
-
In this problem, we continue the accounting for Pure Water, Inc. from Chapter 3. On August 1, Pure Water, Inc., expanded its business and began selling and installing swimming pools and spas. The...
-
Bob met Alice in the summer of 2020 in Paris. They become good friends. Bob works in a bank while Alic is a financial advisor at a private firm. Bob and Alice got married in the fall of 2021 and they...
-
The following 5 point-charged objects are placed on the corners and center of a square as shown. Evaluate the direction of the forces listed. Note that these forces are specifically the force of one...
-
The thermal behaviour of polymers strongly depends on their structure. In below diagram, the E-Modulus as a function of temperature for different polymer structures is shown: Modulus A g B...
-
What volume of water, in mL, is needed to dissolve 7.9 mg of nitrogen gas (28.0134 g/mol) when the partial pressure of nitrogen above the water is 1.1 atm at 25 C? The Henry's constant for nitrogen...
-
A communication system delivers an output given by: u(t)= A x [cos(2 t) + a x cos(2 fm t)] [cos(2 fe t + c)] with fe >> fm. Hence, determine the following: (i) Discrete spectral frequencies...
-
A single-phase, \(120-\mathrm{V}\) (rms), \(60-\mathrm{Hz}\) source supplies power to a series \(\mathrm{R}\) - \(\mathrm{L}\) circuit consisting of \(\mathrm{R}=10 \Omega\) and \(\mathrm{L}=40...
-
The vapor pressure of the liquid NH, is measured at different temperatures. The following vapor pressure data are obtained. Temperature, K P, mmHg 217.1 223.4 234.7 588.1 Calculate the enthalpy of...
-
How many significant digits are in the following unit factor: 1 kg/2.20 lb?
-
Explain the risk and rewards to a company that result from having fixed costs.
-
Are companies with predominately fixed cost structures likely to be most profitable?
-
Are companies with predominately fixed cost structures likely to be most profitable?
-
Draw the shear diagram for the beam. Set P = 600 lb, a = 5 ft, b = 7 ft. Draw the moment diagram for the beam.
-
Ahmed, Bassem and Jamal are partners in Tadamon Company who share profits and losses at a ratio of 2 : 2 : 4 respectively. On 1 / 1 / 2 0 2 2 , it was decided to liquidate the company, and the...
-
Draw the shear diagram for the beam. Follow the sign convention. Draw the moment diagram for the beam. Follow the sign convention.
Study smarter with the SolutionInn App