The following is a condensed trial balance of Probe Co., a publicly held company, after adjustments...

    

Transcribed Image Text:

The following is a condensed trial balance of Probe Co., a publicly held company, after adjustments for income tax expense Probe Co CONDENSED TRIAL BALANCE Cash Accounts receivable, net Property, plant, and equipment Accumulated depreciation Dividends payable Income taxes payable Deferred income tax liability Bonds payable Unamortized premium on boods Common stock Additional paid-in capital Retained earnings Sales Cost of sales Selling and administrative expenses Interest income Interest expense Depreciation Loss on sale of equipment Gain on extinguishment of boods Income tax expense 12/31/10 Balances Dr. (Cn) $.484,000 670,000 1,070,000 (345,000) (25,000) (60,000) (63,000) (500,000) (71,000) (350,000) (430,000) (185,000) (2.420,000) 1,863.000 220,000 (14,000) 46,000 88,000 7,000 (90,000) 105,000 0 12/31/V9 Balances Dr. (Cn) $817,000 610,000 995,000 (280,000) (10,000) (150.000) (42,000) (1,000,0000 (150,000) (150,000) (375,000) (265.000) Net change Dr. (Cr.) $(333,000) 60,000 75,000 (65,000) (15,000) 90,000 (21,000) 500,000 79,000 (200,000) (55,000) 80,000 300.000 Additional information During year 10 equipment with an original cost of $50,000 was sold for cash, and equipment costing $125,000 was purchased On January 1, year 10, bonds with a par value of $500,000 and related premium of $75,000 were redeemed. The $1,000 face value. 10% par bonds had been issued on January 1, year 1, to yield 8%. Interest is payable annually every December 31 through year 20 • Probe's tax payments during year 10 were debited to Income Taxes Payable. Probe recorded a deferred income tax liability of $42,000 based on temporary differences of $120,000 and an enacted tax rate of 35% at December 31, year 9; prior to year 9 there were no temporary differences. Probe's year 10 financial statement income before income taxes was greater than its year 10 taxable income, due entirely to temporary differences, by $60,000. Probe's cumulative net taxable temporary differences at December 31, year 10, were $180,000. Probe's enacted tax rate for the current and future years is 35%. • 60,000 shares of common stock, $2.50 par, were outstanding on December 31, year 9. Probe issued an additional 80,000 shares on April 1, year 10. There were no changes to retained earnings other than dividends declared Prepare a statement of cash flows using the indirect method. Select the titles and the numbers from the lists provided. You may use a number more than once, if necessary. You should also enter the following amounts: Subtotals for each class of activity. Net change in cash for the year. • Reconciliation to cash amounts. Complete the following statement of cash flows using the indirect method. (Select from titles and amounts from the tables that follow.) From Operating Activities From Investing Activities From Financing Activities Probe Co STATEMENT OF CASH FLOWS For the Year Ending 12/31/10 Cash Source (Use) The following is a condensed trial balance of Probe Co., a publicly held company, after adjustments for income tax expense Probe Co CONDENSED TRIAL BALANCE Cash Accounts receivable, net Property, plant, and equipment Accumulated depreciation Dividends payable Income taxes payable Deferred income tax liability Bonds payable Unamortized premium on boods Common stock Additional paid-in capital Retained earnings Sales Cost of sales Selling and administrative expenses Interest income Interest expense Depreciation Loss on sale of equipment Gain on extinguishment of boods Income tax expense 12/31/10 Balances Dr. (Cn) $.484,000 670,000 1,070,000 (345,000) (25,000) (60,000) (63,000) (500,000) (71,000) (350,000) (430,000) (185,000) (2.420,000) 1,863.000 220,000 (14,000) 46,000 88,000 7,000 (90,000) 105,000 0 12/31/V9 Balances Dr. (Cn) $817,000 610,000 995,000 (280,000) (10,000) (150.000) (42,000) (1,000,0000 (150,000) (150,000) (375,000) (265.000) Net change Dr. (Cr.) $(333,000) 60,000 75,000 (65,000) (15,000) 90,000 (21,000) 500,000 79,000 (200,000) (55,000) 80,000 300.000 Additional information During year 10 equipment with an original cost of $50,000 was sold for cash, and equipment costing $125,000 was purchased On January 1, year 10, bonds with a par value of $500,000 and related premium of $75,000 were redeemed. The $1,000 face value. 10% par bonds had been issued on January 1, year 1, to yield 8%. Interest is payable annually every December 31 through year 20 • Probe's tax payments during year 10 were debited to Income Taxes Payable. Probe recorded a deferred income tax liability of $42,000 based on temporary differences of $120,000 and an enacted tax rate of 35% at December 31, year 9; prior to year 9 there were no temporary differences. Probe's year 10 financial statement income before income taxes was greater than its year 10 taxable income, due entirely to temporary differences, by $60,000. Probe's cumulative net taxable temporary differences at December 31, year 10, were $180,000. Probe's enacted tax rate for the current and future years is 35%. • 60,000 shares of common stock, $2.50 par, were outstanding on December 31, year 9. Probe issued an additional 80,000 shares on April 1, year 10. There were no changes to retained earnings other than dividends declared Prepare a statement of cash flows using the indirect method. Select the titles and the numbers from the lists provided. You may use a number more than once, if necessary. You should also enter the following amounts: Subtotals for each class of activity. Net change in cash for the year. • Reconciliation to cash amounts. Complete the following statement of cash flows using the indirect method. (Select from titles and amounts from the tables that follow.) From Operating Activities From Investing Activities From Financing Activities Probe Co STATEMENT OF CASH FLOWS For the Year Ending 12/31/10 Cash Source (Use)

Answer rating: 100% (QA)

Indirect presentation classification of cash flow and disclosure AICPA adapted ... View the full answer