The following information was taken from the accounting records of the Lamberson Company: Additional information for the year:(a) Sales ............$ 39,930Cost of goods sold .........(19,890)Depreciation expense .......(2,100)Wages expense .........(11,000)Other operating expenses .......(1,000)Bond interest expense .........(410)Dividend revenue ...........820Gain on sale of investments .......700Loss on sale of equipment .....(200)Income tax expense .........(2,050)Net income ...........$ 4,800(b) Dividends declared and paid totaled $700.(c) On

Chapter 22, Problems #7
The following information was taken from the accounting records of the Lamberson Company:

The following information was taken from the accounting records of

Additional information for the year:
(a)
Sales ............$ 39,930
Cost of goods sold .........(19,890)
Depreciation expense .......(2,100)
Wages expense .........(11,000)
Other operating expenses .......(1,000)
Bond interest expense .........(410)
Dividend revenue ...........820
Gain on sale of investments .......700
Loss on sale of equipment .....(200)
Income tax expense .........(2,050)
Net income ...........$ 4,800
(b) Dividends declared and paid totaled $700.
(c) On January 1, 2007, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion.
(d) Long-term nonmarketable investments that cost $1,600 were sold for $2,300.
(e) The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year.
(f) Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets.
(g) Equipment was purchased at a cost of $16,200.
(h) The 12% bonds payable were issued on August 31, 2007 at 97. They mature on August 31, 2017. The company uses the straight-line method to amortize the discount.
(i) Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable.
(j) Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.
Required
1. Prepare a worksheet (spreadsheet) to support the Lamberson Company€™s statement of cash flows for 2007.
2. Prepare the statement of cash flows.
3. Compute the cash flow from operations to sales ratio and the profit margin ratio for 2007. What is the primary reason for the difference in the results of theratios?

Common Stock
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...
Par Value
Par value is the face value of a bond. Par value is important for a bond or fixed-income instrument because it determines its maturity value as well as the dollar value of coupon payments. The market price of a bond may be above or below par,...
Portfolio
A portfolio is a grouping of financial assets such as stocks, bonds, commodities, currencies and cash equivalents, as well as their fund counterparts, including mutual, exchange-traded and closed funds. A portfolio can also consist of non-publicly...

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Intermediate Accounting

10th Edition

Authors: Loren A Nikolai, D. Bazley and Jefferson P. Jones

ISBN: 978-0324300987

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