ACCT557 – Week 6 HW Questions

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Description

Problems:
Financial data of Fancy Footwork Company for 2013 and 2012 are presented below.

FANCY FOOTWORK COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2013 AND 2012

2013 2012
Cash $ 260,000 $ 230,000
Receivables $ 156,000 $ 120,000
Inventory $ 180,000 $ 220,000
Plant assets $ 160,000 $ 135,000
Accumulated depreciation $ (80,000) $ (76,000)
Long-term investments (held-to-maturity) $ 80,000 $ 93,000
$ 756,000 $ 722,000

Accounts payable $ 135,000 $ 122,000
Accrued liabilities $ 30,000 $ 33,100
Bonds payable $ 135,000 $ 166,000
Common stock $ 180,000 $ 165,000
Retained earnings $ 276,000 $ 235,900
$ 756,000 $ 722,000

FANCY FOOTWORK COMPANY
INCOME STATEMENT
For the year ended Dec 31, 2013
Sales 750000
Cost of Goods Sold 530000
Gross Margin 220000
Selling and administrative expenses 106000
Income from Operations 114000
Other revenues and gains
Gain on sale of investments 7000
Income before tax 121000
Income tax expense 48400
Net Income 72600

Additional information:
During the year, $9000 of common stock was issued in exchange for plant assets. No plant assets were sold in 2012. Cash dividends were $32500.

Required:
A) Prepare a statement of cash flows using the indirect method
B) Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule.)

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ACCT557 – Week 6 HW Questions

$16.00

Description

Problems:
Financial data of Fancy Footwork Company for
2013 and 2012 are presented below.

FANCY FOOTWORK COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2013 AND 2012

2013 2012
Cash $ 260,000 $ 230,000
Receivables $ 156,000 $ 120,000
Inventory $ 180,000 $ 220,000
Plant assets $ 160,000 $ 135,000
Accumulated depreciation $ (80,000) $ (76,000)
Long-term investments (held-to-maturity) $
80,000 $ 93,000
$ 756,000 $ 722,000

Accounts payable $ 135,000 $ 122,000
Accrued liabilities $ 30,000 $ 33,100
Bonds payable $ 135,000 $ 166,000
Common stock $ 180,000 $ 165,000
Retained earnings $ 276,000 $ 235,900
$ 756,000 $ 722,000

FANCY
FOOTWORK COMPANY
INCOME STATEMENT
For the year ended Dec 31, 2013
Sales 750000
Cost of Goods Sold 530000
Gross Margin 220000
Selling and administrative expenses 106000
Income from Operations 114000
Other revenues and gains
Gain on sale of investments 7000
Income before tax 121000
Income tax expense 48400
Net Income 72600

Additional information:
During the year, $9000 of common stock was
issued in exchange for plant assets. No plant assets were sold in 2012. Cash
dividends were $32500.

Required:
A) Prepare a statement of cash flows using the
indirect method
B) Prepare a statement of cash flows using the
direct method. (Do not prepare a reconciliation schedule.)

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