Use the following excerpts from Zowleski Companys financial information to prepare a statement of cash flows (indirect
Question:
Use the following excerpts from Zowleski Company’s financial information to prepare a statement of cash flows (indirect method) for the year 2018.
Cash Account Receivable Merchandise Inventory Plant Assets Accumulated Depreciation Total Assets Accounts Payable Notes Payable Common Stock Retained Earnings Total Liabilities and Equity Additional information: Net income for 2018 Depreciation expense for 2018 (accumulated depreciation increase) Plant assets purchased (plant assets increase), financed by note Notes payable increased by amount of plant asset purchase Notes payable decreased by amount of principal note payments Dec. 31, 2018 $ 92,300 22,000 140,000 180,000 (25,000) 409,300 18,500 135,500 20,000 235,300 409,300 28,400 4,000 30,000 30,000 14,500 Dec. 31, 2017 $ 85,000 22,900 131,000 150,000 (21,000) 367,900 21,000 120,000 20,000 206,900 367,900
Step by Step Answer:
Principles Of Accounting Volume 1 Financial Accounting
ISBN: 9781593995942
1st Edition
Authors: Mitchell Franklin, Patty Graybeal, Dixon Cooper, OpenStax
Related Video
Depreciation of non-current assets is the process of allocating the cost of the asset over its useful life. The cost of the asset includes the purchase price, any additional costs incurred to bring the asset to its current condition and location, and any other costs that are directly attributable to the asset. The useful life of the asset is the period over which the asset is expected to be used by the company. To calculate the depreciation, companies use different methods such as straight-line, declining-balance, sum-of-the-years\'-digits, units-of-production, and group depreciation. The chosen method will depend on the type of asset, the company\'s accounting policies, and the accounting standards that are applicable. The straight-line method allocates an equal amount of the asset\'s cost over its useful life, while the declining-balance method calculates depreciation at a fixed rate, typically double the straight-line rate, but the amount of depreciation decreases over time. The sum-of-the-years\'-digits method is similar to the declining-balance method, but the rate of depreciation is calculated using a fraction that is based on the useful life of the asset. It\'s important to note that the depreciation expense will be recorded on the company\'s income statement and the accumulated depreciation will be recorded on the company\'s balance sheet. This will decrease the value of the asset on the balance sheet over time.
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