Below are balance sheet and income statement data for Supersonic Corporation. (For the balance sheet data, the

Question:

Below are balance sheet and income statement data for Supersonic Corporation. (For the balance sheet data, the end-of-year information is in the left column.)

Balance Sheet

Below are balance sheet and income statement data for Supersonic
Below are balance sheet and income statement data for Supersonic

Income Statement (for 2013)

Below are balance sheet and income statement data for Supersonic

Additional information for Supersonic Corporation is as follows:
(a) Bad debt expense of $185 is included in selling and administrative expenses.
(b) Property, plant, and equipment was sold during 2013 for $900 cash.
(c) All accounts payable relate to inventory purchases.
(d) During 2013, Supersonic capitalized $75 of interest associated with the construction of a building. None of the interest payable relates to this capitalized interest.
(e) On July 15, 2013, Supersonic repurchased shares of its own stock for $130. On December 19, 2013, Supersonic resold the shares for $90. Supersonic uses the cost method for accounting for treasury stock.
(f) On November 17, 2013, Supersonic declared and issued a 10% stock dividend. The number of shares of common stock outstanding increased from 200 to 220. After the stock dividend, the market price per share of common stock was $60.
(g) During the year, Supersonic capitalized $160 in expenditures for software.
The capitalized costs are being amortized over the estimated useful life of the development costs.
(h) On January 1, 2013, Supersonic signed an agreement to lease a piece of equipment. The lease is being accounted for as a capital lease. The annual lease payment is $50. The present value of the minimum lease payments is $257. The leased asset has been included in property, plant, and equipment, and the lease liability is included in long-term debt. The lease term is nine years, and the implicit interest rate is 13%.
(i) Supersonic uses the LIFO method of inventory valuation. During the year, Supersonic dipped into its LIFO layers. As a result, cost of goods sold was $128 lower than it otherwise would have been.
(j) On January 1, 2013, Supersonic purchased 30% of Micro Inc. for $240 cash. At the time, the book value of Micro's net assets was $800. Net income for 2013 for Micro Inc. was $200.
(k) During the year, all of the convertible preferred stock was converted into shares of Supersonic common stock.
Instructions:
Prepare a complete statement of cash flows for 2013 for Supersonic Corporation. Use the direct method for reporting cash flows from operating activities?

Common Stock
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on...
Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...
Corporation
A Corporation is a legal form of business that is separate from its owner. In other words, a corporation is a business or organization formed by a group of people, and its right and liabilities separate from those of the individuals involved. It may...
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Intermediate Accounting

ISBN: 978-0538479738

18th edition

Authors: Earl K. Stice, James D. Stice

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