MacFarlane Inc. Balance Sheets as of December 31 2017 2016 Cash $465,000 $225,000 427,500 150,000 Accounts...

 

Transcribed Image Text:

MacFarlane Inc. Balance Sheets as of December 31 2017 2016 Cash $465,000 $225,000 427,500 150,000 Accounts receivable 407,500 Inventory 211,000 Prepaid insurance Plant and equipment 25,000 36,000 1,215.000 1,200,000 Accumulated Depreciation (240,000) (300,000) Land 1,216,500 $3,300,000 601,500 $2,340,000 Accounts Payable Wages Payable Interest Payable $150,000 30,000 $159,000 17,000 19,000 Notes Payable - long-term Common Shares 690,000 300,000 2,040,000 1,500,000 Retained Earnings 375,000 $3,300,000 360,000 $2,340,000 MacFarlane Inc. Income Statement for the Year Ended December 31, 2017 Revenue $1,200,000 Expenses and losses: Cost of goods sold Administrative expenses Wage expense Depreciation expense $540,000 195,000 180,000 75,000 Interest expense 30,000 Insurance expense 15,000 Losses on sale of equipment 30,000 Income tax expense 45,000 Total expenses and losses 1,110,000 Net Income $90,000 Other Information: • Sold equipment for $60,000 cash (cost = $225,000, accumulated depreciation = $135,000). • Acquired land for $315,000 and issued common shares as payment in full. • Acquired equipment for $240,000. Issued a $150,000, three-year, interest bearing note payable and paid the rest in cash. • Paid a $150,000 long-term note by issuing commons shares to the creditor. Required: Prepare a cash flow statement in good form with indirect method for Macfarlane Inc. for the year ended December 31, 2017. Provide all disclosures and supplementary information that is required. Make reasonable assumptions for any information that is missing. Show your work and provide all supporting calkulations. MacFarlane Inc. Balance Sheets as of December 31 2017 2016 Cash $465,000 $225,000 427,500 150,000 Accounts receivable 407,500 Inventory 211,000 Prepaid insurance Plant and equipment 25,000 36,000 1,215.000 1,200,000 Accumulated Depreciation (240,000) (300,000) Land 1,216,500 $3,300,000 601,500 $2,340,000 Accounts Payable Wages Payable Interest Payable $150,000 30,000 $159,000 17,000 19,000 Notes Payable - long-term Common Shares 690,000 300,000 2,040,000 1,500,000 Retained Earnings 375,000 $3,300,000 360,000 $2,340,000 MacFarlane Inc. Income Statement for the Year Ended December 31, 2017 Revenue $1,200,000 Expenses and losses: Cost of goods sold Administrative expenses Wage expense Depreciation expense $540,000 195,000 180,000 75,000 Interest expense 30,000 Insurance expense 15,000 Losses on sale of equipment 30,000 Income tax expense 45,000 Total expenses and losses 1,110,000 Net Income $90,000 Other Information: • Sold equipment for $60,000 cash (cost = $225,000, accumulated depreciation = $135,000). • Acquired land for $315,000 and issued common shares as payment in full. • Acquired equipment for $240,000. Issued a $150,000, three-year, interest bearing note payable and paid the rest in cash. • Paid a $150,000 long-term note by issuing commons shares to the creditor. Required: Prepare a cash flow statement in good form with indirect method for Macfarlane Inc. for the year ended December 31, 2017. Provide all disclosures and supplementary information that is required. Make reasonable assumptions for any information that is missing. Show your work and provide all supporting calkulations.

Answer rating: 100% (QA)

Required solution is given below Cashflow Statement Cashflows from Operating activities Net in... View the full answer