The accountants at Eternity Department Store are preparing the pro-forma statement of cash flows for 2010. The
Question:
The accountants at Eternity Department Store are preparing the pro-forma statement of cash flows for 2010. The following information is available:
Actual cash balance, December 31, 2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 23,500
Expected net income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 100,000
Dividends to be paid . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20,000
Equipment to be purchased . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 45,000
Expected short-term borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,000
Expected long-term borrowing . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .20,000
Expected depreciation expense for 2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000
Expected issuance of common stock . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000
Expected purchase of a new plant . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73,000
Expected changes in current assets and liabilities during 2010:
Increase in accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1,000
Increase in accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,200
Increase in inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,250
Decrease in income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .1,900
Required:
Prepare the pro-forma statement of cash flows for Eternity Department Store (indirect method).
Common stock is an equity component that represents the worth of stock owned by the shareholders of the company. The common stock represents the par value of the shares outstanding at a balance sheet date. Public companies can trade their stocks on... Accounts Payable
Accounts payable (AP) are bills to be paid as part of the normal course of business.This is a standard accounting term, one of the most common liabilities, which normally appears in the balance sheet listing of liabilities. Businesses receive... Accounts Receivable
Accounts receivables are debts owed to your company, usually from sales on credit. Accounts receivable is business asset, the sum of the money owed to you by customers who haven’t paid.The standard procedure in business-to-business sales is that...
Step by Step Answer:
Eternity Department Store ProForma Statement of Cash Flows For the Year Ended December 31 2010 Cash ...View the full answer
Accounting concepts and applications
ISBN: 978-0538745482
11th Edition
Authors: Albrecht Stice, Stice Swain
