The following information is available for the Selection Company: Selection Company Balance Sheets At December 31...
Fantastic news! We've Found the answer you've been seeking!
Question:
Transcribed Image Text:
The following information is available for the Selection Company: Selection Company Balance Sheets At December 31 Assets: Cash Accounts receivable Merchandise inventory Long-term investments Equipment Accumulated depreciation Total assets Liabilities: Accounts payable Income taxes payable Bonds payable Total liabilities Equity: Share capital Share premium Retained earnings Total equity Total liabilities and equity 2022 $ 22,500 40,000 80,000 70,000 200,000 (32.500) $380,000 $ 78,000 13,000 57.000 $148,000 140,000 15,000 77,000 $232.000 $380.000 2021 $10,000 20,000 70,000 77,000 170,000 (30,000) $317.000 $ 48,000 12,000 79,000 $139,000 115,000 10,000 53,000 $178,000 $317.000 Selection Company Income Statement For Year Ended December 31, 2022 Sales Cost of goods sold Depreciation expense Other operating expenses Interest expense Other gains (losses): Loss on sale of equipment Profit before taxes Income taxes expense Net profit $ 97,000 35,000 57,000 2.400 $288.000 (10,000) 86,600 33.000 $ 53.600 Additional information: a. There was no gain or loss on the sales of the long-term investments, nor on the bonds retired. b. Old equipment with an original cost of $45,000 was sold during the period. c. New equipment was purchased during the period. d. Retained earnings account is only affected by net profit and dividend payment. e. Additional shares were issued for cash. Required: (1) Prepare a complete statement of cash flows for Selection Company in 2022 using the indirect method. (14 marks) (2) Describe the relevance of statement of cash flows to six different decision makers. (6 marks) The following information is available for the Selection Company: Selection Company Balance Sheets At December 31 Assets: Cash Accounts receivable Merchandise inventory Long-term investments Equipment Accumulated depreciation Total assets Liabilities: Accounts payable Income taxes payable Bonds payable Total liabilities Equity: Share capital Share premium Retained earnings Total equity Total liabilities and equity 2022 $ 22,500 40,000 80,000 70,000 200,000 (32.500) $380,000 $ 78,000 13,000 57.000 $148,000 140,000 15,000 77,000 $232.000 $380.000 2021 $10,000 20,000 70,000 77,000 170,000 (30,000) $317.000 $ 48,000 12,000 79,000 $139,000 115,000 10,000 53,000 $178,000 $317.000 Selection Company Income Statement For Year Ended December 31, 2022 Sales Cost of goods sold Depreciation expense Other operating expenses Interest expense Other gains (losses): Loss on sale of equipment Profit before taxes Income taxes expense Net profit $ 97,000 35,000 57,000 2.400 $288.000 (10,000) 86,600 33.000 $ 53.600 Additional information: a. There was no gain or loss on the sales of the long-term investments, nor on the bonds retired. b. Old equipment with an original cost of $45,000 was sold during the period. c. New equipment was purchased during the period. d. Retained earnings account is only affected by net profit and dividend payment. e. Additional shares were issued for cash. Required: (1) Prepare a complete statement of cash flows for Selection Company in 2022 using the indirect method. (14 marks) (2) Describe the relevance of statement of cash flows to six different decision makers. (6 marks)
Expert Answer:
Answer rating: 100% (QA)
Given the information provided and the structure of the indirect method for preparing the statement of cash flows we can walk through the process step by step The indirect method starts with net incom... View the full answer
Related Book For
Financial and Managerial Accounting the basis for business decisions
ISBN: 978-0078111044
16th edition
Authors: Jan Williams, Susan Haka, Mark Bettner, Joseph Carcello
Posted Date:
Students also viewed these accounting questions
-
Consider the following matrix: 1 1 0 0 0 1 0 0 0 0 1 0 0 0 0 1 What kind of transformation does it effect? Justify your answer.
-
(Enter accounts in ascending account order.) Revenue Sales revenue Less: Net sales revenue 70 Less: Gross profit Other revenue: Expenses Total expenses Net profit/(loss) List of Accounts Save for...
-
Find Vo in the circuit shown using Thevenins Theorem 2mA 1KO 12V Vo
-
A small orchard yields 25 bushels of fruit per tree when planted with 40 trees. Because of overcrowding, the yield per tree (for each tree in the orchard) is reduced by 1/2 ushel for each additional...
-
What is the speed of a proton after being accelerated from \(\mathbb{N} T\) rest through a \(50 \times 10^{6} \mathrm{~V}\) potential difference?
-
Labrador Weight Loss Co. offers personal weight reduction consulting services to individuals. After all the accounts have been closed on June 30, 2014, the end of the current fiscal year, the...
-
How does MariaDB's storage engine architecture, featuring options such as InnoDB, MyRocks, and Aria, cater to diverse performance and scalability requirements within complex database environments,...
-
At the end of June, Rick Fontan decided to open his own computer service. Analyze the following transactions he completed by recording their effects in the expanded accounting equation. a. Invested...
-
Jason is applying for the Emerald Advance Loan. You receive a Consumer Security Statement hold on his application. What options do you have for this hold scenario? a. Tell the applicant there is...
-
Shyam and Diya Singh are both 54 years old and have been married for 13 years. They have come to talk to you about retirement planning and want help calculating their net worth. Shyam earns $75,000...
-
Identify and discuss what payroll registers are. 2. Describe how to journalize and post payroll and payroll tax entries. 3. Explain the different federal, state, and city tax deposit forms. 4....
-
The price of a 3-month zero-coupon bond with $100 face value is $99.50. The price of a 6-month zero-coupon bond with $100 face value is $99.10. The price of a fixed- rate coupon bond which has a...
-
When I think of an example of how a geographical location of consumers can affect your selection decision for the best distribution channels; Immediately I think of Amazon. Amazon is an extremely...
-
Explain designs act 2003 with examples in 200-250 wordS
-
Financial market is a place where trading of securities are facilitates and occurs. Financial markets are important for the smooth running of economies. Explain the various kinds of financial and...
-
What is the maximum volume of 0.25 M sodium hypochlorite solution (NaOCl, laundry bleach) that can be prepared by dilution of 1.00 L of 0.80 M NaOCl?
-
Springfield Companys master budget includes estimated costs and expenses of $325,000 for its third quarter of operations. Of this amount, $300,000 is expected to be financed with current payables....
-
What is the basic purpose of classifications in financial statements? Identify the classifications widely used in a balance sheet, a multiple-step income statement, and a statement of cash flows.
-
In the past, Abbott Labs had two bond issues outstanding with the following characteristics: Instructions Answer the following questions regarding these bond issues: a. Which issue, A or B, has the...
-
Summer and winter constellations are different because (a) of the spin of Earth about its polar axis. (b) the night sky faces in opposite directions in summer and winter. (c) of the tilt of Earths...
-
The longest-lived stars are those of (a) low mass. (b) high mass. (c) intermediate mass. (d) infinite mass.
-
What is the star nearest Earth? (a) Proxima Centauri (b) Polaris (c) Mercury (d) the Sun
Study smarter with the SolutionInn App