Prepare cash flow statement of Rays and Rise Corporation using the indirect method. Rays Additional Information: Net
Question:
Prepare cash flow statement of Rays and Rise Corporation using the indirect method.
Rays Additional Information:
Net income for the year amounted to $604,000. Net sales are $1,100,000, dividends revenue are $10,000, interest revenue is $9,000, Cost of goods sold are $292,000, operating expenses are 320,000 including depreciation expense of $60,000, interest expense is $119,000 and tax expense is $136,000.
Purchased $600,000 in plant assets, paying $460,000 cash and issuing a long term note payable for the $140,000 balance. Plant asset sold for $413,000 with a book value of $311,000.
Moreover Market securities account shows debit entries of $365,000 representing the cost of securities purchased. It also shows a credit entry of $234,000 representing the cost of securities sold.
Furthermore, Notes Receivable accounts shows $417,000 in debt entries represent cash loaned by Rays Corporation to borrower during the year and $615,000 in credit entry represents collections of notes receivable.
During the year, Rays Corporation borrowed $819,000 cash by issuing short term notes payable to banks. Also, the company repaid $917,000 in principle amount due on these loans. The company issued 6,000 shares of $20 par value capital stock for cash at a price of $117 per share.
Market securities costing $370,000 were sold for $466,000 resulting in non operating gain.
Rise Additional Information:
Net income for the year amounted to $450,000. Net sales are $1,100,000, dividends revenue are $10,000, interest revenue is $9,000, Cost of goods sold are $392,000, operating expenses are 220,000 including depreciation expense of $60,000, interest expense is $41,000 and tax expense is $41,000.
Purchased $600,000 in plant assets, paying $460,000 cash and issuing a long term note payable for the $140,000 balance. Plant asset sold for $413,000 with a book value of $311,000.
Moreover Market securities account shows debit entries of $365,000 representing the cost of securities purchased. It also shows a credit entry of $234,000 representing the cost of securities sold.
Furthermore, Notes Receivable accounts shows $417,000 in debt entries represent cash loaned by Rise Corporation to borrower during the year and $915,000 in credit entry represents collections of notes receivable.
During the year, Rise Corporation borrowed $776,000 cash by issuing short term notes payable to banks. Also, the company repaid $917,000 in principle amount due on these loans. The company issued 3,000 shares of $40 par value capital stock for cash at a price of $58 per share.
Market securities costing $476,000 were sold for $399,000 resulting in non operating loss.
Intermediate Accounting
ISBN: 978-0071339476
Volume 1, 6th Edition
Authors: Beechy Thomas, Conrod Joan, Farrell Elizabeth, McLeod-Dick I