Required information
[The following information applies to the questions displayed below.]
Lansing Company’s cu
ent-year income statement and selected balance sheet data at December 31 of the cu
ent and prior years follow.
LANSING COMPANY
Income Statement
For Cu
ent Year Ended December 31
Sales revenue
$
106,200
Expenses
Cost of goods sold
45,000
Depreciation expense
13,500
Salaries expense
21,000
Rent expense
9,300
Insurance expense
4,100
Interest expense
3,900
Utilities expense
3,100
Net income
$
6,300
LANSING COMPANY
Selected Balance Sheet Accounts
At December 31
Cu
ent Yea
Prior Yea
Accounts receivable
$
5,900
$
6,400
Inventory
2,280
1,690
Accounts payable
4,700
5,200
Salaries payable
940
730
Utilities payable
280
190
Prepaid insurance
290
340
Prepaid rent
280
210
Forten Company's cu
ent year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses.
FORTEN COMPANY
Comparative Balance Sheets
December 31
Cu
ent Yea
Prior Yea
Assets
Cash
$
66,400
$
84,500
Accounts receivable
82,380
61,625
Inventory
292,156
262,800
Prepaid expenses
1,320
2,115
Total cu
ent assets
442,256
411,040
Equipment
146,500
119,000
Accum. depreciation—Equipment
(42,125
)
(51,500
)
Total assets
$
546,631
$
478,540
Liabilities and Equity
Accounts payable
$
64,141
$
131,175
Short-term notes payable
13,300
8,200
Total cu
ent liabilities
77,441
139,375
Long-term notes payable
59,500
59,750
Total liabilities
136,941
199,125
Equity
Common stock, $5 par value
179,250
161,250
Paid-in capital in excess of par, common stock
54,000
0
Retained earnings
176,440
118,165
Total liabilities and equity
$
546,631
$
478,540
FORTEN COMPANY
Income Statement
For Cu
ent Year Ended December 31
Sales
$
637,500
Cost of goods sold
296,000
Gross profit
341,500
Operating expenses
Depreciation expense
$
31,750
Other expenses
143,400
175,150
Other gains (losses)
Loss on sale of equipment
(16,125
)
Income before taxes
150,225
Income taxes expense
39,650
Net income
$
110,575
Additional Information on Cu
ent Year Transactions
a. The loss on the cash sale of equipment was $16,125 (details in b).
. Sold equipment costing $79,875, with accumulated depreciation of $41,125, for $22,625 cash.
c. Purchased equipment costing $107,375 by paying $52,000 cash and signing a long-term note payable for the balance.
d. Bo
owed $5,100 cash by signing a short-term note payable.
e. Paid $55,625 cash to reduce the long-term notes payable.
f. Issued 3,600 shares of common stock for $20 cash per share.
g. Declared and paid cash dividends of $52,300.
Required:
2. Prepare a complete statement of cash flows using the indirect method for the cu
ent year. (Amounts to be deducted should be indicated with a minus sign.)
FORTEN COMPANY
Statement of Cash Flows
For Cu
ent Year Ended December 31
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operations:
Cash flows from investing activities
Cash flows from financing activities:
Net increase (decrease) in cash
Cash balance at December 31, prior yea
Cash balance at December 31, cu
ent yea
3. Prepare a complete statement of cash flows using a spreadsheet using the indirect method. (Enter all amounts as positive values.)
FORTEN COMPANY
Spreadsheet for Statement of Cash Flows
For Cu
ent Year Ended December 31
Analysis of Changes
December 31, Prior Yea
Debit
Credit
December 31, Cu
ent Yea
Balance sheet—debit
Cash
$84,500
$66,400
Accounts receivable
61,625
Inventory
262,800
Prepaid expenses
2,115
Equipment
119,000
$530,040
Balance sheet—credit
Accumulated depreciation—Equipment
$51,500
Accounts payable
131,175
Short-term notes payable
8,200
Long-term notes payable
59,750
Common stock, $5 par value
161,250
Paid-in capital in excess of par value, common stock
0
Retained earnings
118,165
$530,040
Statement of cash flows
Operating activities
Investing activities
Financing activities
Non cash investing and financing activities
Purchase of equipment financed by long-term note payable
Golden Corp.'s cu
ent year income statement, comparative balance sheets, and additional information follow. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are all cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes.
GOLDEN CORPORATION
Comparative Balance Sheets
December 31
Cu
ent Yea
Prior Yea
Assets
Cash
$
171,000
$
114,700
Accounts receivable
93,500
78,000
Inventory
611,500
533,000
Total cu
ent assets
876,000
725,700
Equipment
353,800
306,000
Accum. depreciation—Equipment
(161,500
)
(107,500
)
Total assets
$
1,068,300
$
924,200
Liabilities and Equity
Accounts payable
$
101,000
$
78,000
Income taxes payable
35,000
28,600
Total cu
ent liabilities
136,000
106,600
Equity
Common stock, $2 par value
600,400
575,000
Paid-in capital in excess of par value, common stock
208,600
170,500
Retained earnings
123,300
72,100
Total liabilities and equity
$
1,068,300
$
924,200
GOLDEN CORPORATION
Income Statement
For Cu
ent Year Ended December 31
Sales
$
1,827,000
Cost of goods sold
1,093,000
Gross profit
734,000
Operating expenses
Depreciation expense
$
54,000
Other expenses
501,000
555,000
Income before taxes
179,000
Income taxes expense
31,800
Net income
$
147,200
Additional Information on Cu
ent Year Transactions
a. Purchased equipment for $47,800 cash.
. Issued 12,700 shares of common stock for $5 cash per share.
c. Declared and paid $96,000 in cash dividends.
4. Prepare a complete statement of cash flows using the indirect method for the cu
ent year. (Amounts to be deducted should be indicated with a minus sign.)
GOLDEN CORPORATION
Statement of Cash Flows
For Cu
ent Year Ended December 31
Cash flows from operating activities
Adjustments to reconcile net income to net cash provided by operations:
$0
Cash flows from investing activities
0
Cash flows from financing activities:
0
Net increase (decrease) in cash $0
Cash balance at December 31, prior year
Cash balance at December 31, cu
ent year $0
5. Prepare a complete statement of cash flows using a spreadsheet under the indirect method. (Enter all amounts as positive values.)
GOLDEN CORPORATION
Spreadsheet for Statement of Cash Flows
For Cu
ent Year Ended December 31
Analysis of Changes
December 31, Prior Yea
Debit