Neighborhood Supermarkets is preparing to go public, and you are asked to assist the firm by preparing
Question:
Additional Information:
a. The only entries in retained earnings for 2014 were for net income and cash dividends.
b. During 2014, bad debt expenses of $906 were included in operating, general, and administrative expenses; no accounts were written off.
c. Adjusting marketable securities upward by $68 led to the increase of $44 in accumulated other comprehensive income, after considering the deferred tax effect of $24.
d. On July 1, 2014, Neighborhood Supermarkets bought land ($190) and equipment ($20,000), paying $10,190 in cash and issuing a $10,000 five-year note payable with interest at 6% pay able annually. Accrued interest on the note was included in operating, general, and administrative expenses because the amount was deemed too immaterial to report separately.
e. No treasury stock was reissued during 2014.
f. Equipment costing $9,052 with a book value of $1,051 was sold for cash.
g. A much smaller competitor was acquired on December 31, 2014, for $34,890 cash and a 7%, $15,000 note that matures in two years. Neighborhood allocated the acquisition cost as follows: inventory, $5,500; intangibles, $5,926; equipment, $16,195; leasehold im provements, $2,829; goodwill, $19,440.
Required:
Use the indirect method to prepare Neighborhood Supermarkets' statement of cash flows for 2014. Use the worksheet approach from theappendix.
Step by Step Answer:
Financial Reporting and Analysis
ISBN: 978-0078025679
6th edition
Authors: Flawrence Revsine, Daniel Collins, Bruce, Mittelstaedt, Leon