Following are comparative balance sheets for Millco Inc. at January 31 and February 28, 2020: Assets...
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Following are comparative balance sheets for Millco Inc. at January 31 and February 28, 2020: Assets Cash Accounts receivable Merchandise inventory Total current assets Plant and equipment: Production equipment Less: Accumulated depreciation Total assets Liabilities Accounts payable Short-term debt. Other accrued liabilities Total current liabilities Long-term debt Total liabilities MILLCO INC. Balance Sheets February 28 and January 31, 2020 Stockholders' Equity Common stock, no par value, 20,000 shares authorized, 15,000 and 14,000 shares issued, respectively Retained earnings: Beginning balance Net income for month Dividends Ending balance. Total stockholders' equity Total liabilities and stockholders' equity February 28 $ 21,000 32,000 40,500 $ 93,500 83,000 (12,000) $164,500 $ 18,500 22,000 10,500 $ 51,000 16,500 $ 67,500 $ 52,000 $ 32,000 18,000 (5,000) $ 45,000 $ 97,000 $164,500 January 31 $ 18,500 26,500 47,000 $ 92,000 76,000 (10,500) $157,500 $ 20,500 22,000 12,000 $ 54,500 23,000 $ 77,500 $ 48,000 $ 21,500 14,500 (4,000) $ 32,000 $ 80,000 $157,500 Required: a. Calculate the change that occurred in cash during the month. You may assume that the change in each balance sheet amount is due to a single event (for example, the change in the amount of production equipment is not the result of both a purchase and sale of equipment). Because the retained earnings section of the balance sheet is, in and of itself, an analysis of the change in the retained earnings account for the month, the row for net income and dividends should be entered as the February amount and not the change. Use the space to the right of the January 31 data to enter the difference between the February 28 and January 31 amounts of each balance sheet item. b. Prepare a statement of cash flows that explains above changes? Following are comparative balance sheets for Millco Inc. at January 31 and February 28, 2020: Assets Cash Accounts receivable Merchandise inventory Total current assets Plant and equipment: Production equipment Less: Accumulated depreciation Total assets Liabilities Accounts payable Short-term debt. Other accrued liabilities Total current liabilities Long-term debt Total liabilities MILLCO INC. Balance Sheets February 28 and January 31, 2020 Stockholders' Equity Common stock, no par value, 20,000 shares authorized, 15,000 and 14,000 shares issued, respectively Retained earnings: Beginning balance Net income for month Dividends Ending balance. Total stockholders' equity Total liabilities and stockholders' equity February 28 $ 21,000 32,000 40,500 $ 93,500 83,000 (12,000) $164,500 $ 18,500 22,000 10,500 $ 51,000 16,500 $ 67,500 $ 52,000 $ 32,000 18,000 (5,000) $ 45,000 $ 97,000 $164,500 January 31 $ 18,500 26,500 47,000 $ 92,000 76,000 (10,500) $157,500 $ 20,500 22,000 12,000 $ 54,500 23,000 $ 77,500 $ 48,000 $ 21,500 14,500 (4,000) $ 32,000 $ 80,000 $157,500 Required: a. Calculate the change that occurred in cash during the month. You may assume that the change in each balance sheet amount is due to a single event (for example, the change in the amount of production equipment is not the result of both a purchase and sale of equipment). Because the retained earnings section of the balance sheet is, in and of itself, an analysis of the change in the retained earnings account for the month, the row for net income and dividends should be entered as the February amount and not the change. Use the space to the right of the January 31 data to enter the difference between the February 28 and January 31 amounts of each balance sheet item. b. Prepare a statement of cash flows that explains above changes?
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a To calculate the change that occurred in cash during the month subtract the January 31 cash balanc... View the full answer
Related Book For
Accounting What the Numbers Mean
ISBN: 978-1260565492
12th edition
Authors: David Marshall, Wayne McManus, Daniel Viele
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