Happy Holidays Co. is a retail store that sells high-end travel accessories. Below is the financial...

   

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Happy Holidays Co. is a retail store that sells high-end travel accessories. Below is the financial information for the company Happy Holiday, Co. Income Statement (Condensed) Year Ended December 31, 2016 Revenues Sales $297,500 Cost of goods sold 99,460 Gross Profit 198,040 Operating expenses (excluding depreciation expense) $73,370 Depreciation expense 58,000 131.370 Profit from Operations 66,670 Other Revenue and expenses Interest expense Gain on sale of equipment Profit before income tax 10,440 8,750 64,980 Income tax expense Profit 32,670 $ 32,310 Additional information for 2016: 1. A cash dividend was paid. You must determine the amount 2. Land was acquired by paying $50,000 cash and signing a $50,000 long-term note payable. 3. Equipment costing $25,000 was purchased for cash. 4. Equipment was sold for $17,750. It had a carrying amount or book value of $9,000 (cost of $10,000 less accumulated depreciation of $1,000). Required: (Show all calculations and round to closest dollar) a. Prepare the cash flow statement using the INDIRECT METHOD b. Show the ledger or T-accounts for the transactions in the following accounts: Property, Plant and Equipment i. Accumulated Depreciation Retained Earnings c. Answer the following questions: i. ii. Does the company have enough cash flow to pay its current liabilities? Explain. What was the primary source of cash? What was the primary use of cash? d. Are there any non-cash investing or financing activities? Explain. Happy Holidays Co. is a retail store that sells high-end travel accessories. Below is the financial information for the company Happy Holiday, Co. Income Statement (Condensed) Year Ended December 31, 2016 Revenues Sales $297,500 Cost of goods sold 99,460 Gross Profit 198,040 Operating expenses (excluding depreciation expense) $73,370 Depreciation expense 58,000 131.370 Profit from Operations 66,670 Other Revenue and expenses Interest expense Gain on sale of equipment Profit before income tax 10,440 8,750 64,980 Income tax expense Profit 32,670 $ 32,310 Additional information for 2016: 1. A cash dividend was paid. You must determine the amount 2. Land was acquired by paying $50,000 cash and signing a $50,000 long-term note payable. 3. Equipment costing $25,000 was purchased for cash. 4. Equipment was sold for $17,750. It had a carrying amount or book value of $9,000 (cost of $10,000 less accumulated depreciation of $1,000). Required: (Show all calculations and round to closest dollar) a. Prepare the cash flow statement using the INDIRECT METHOD b. Show the ledger or T-accounts for the transactions in the following accounts: Property, Plant and Equipment i. Accumulated Depreciation Retained Earnings c. Answer the following questions: i. ii. Does the company have enough cash flow to pay its current liabilities? Explain. What was the primary source of cash? What was the primary use of cash? d. Are there any non-cash investing or financing activities? Explain.

Answer rating: 100% (QA)

Here are the calculations required a Cash Flow Statement Net Income 32310 Adjustments Depreciation 5... View the full answer