Question: Exhibit 16.13 presents the comparative balance
Exhibit 16.13 presents the comparative balance sheets for Plainview Corporation for 2013 and 2014. The following additional information relates to 2014 activities:
(1) The Retained Earnings account changed as follows:
(2) On January 2, 2014, Plainview Corporation sold for $127,000 marketable securities with an acquisition cost and a carrying value of $110,000. The firm used the proceeds from this sale, the funds in the bond sinking fund, and the amount received from the issuance of the 8% debentures to retire the 6% mortgage bonds.
(3) The firm reissued treasury stock on February 28, 2014. It treats “losses†on the reissue of treasury stock as a charge to Retained Earnings.
(4) The firm declared a stock dividend on October 31, 2014, when the market price of Plainview Corporation’s stock was $12 per share.
(5) On April 30, 2014, a fire destroyed a warehouse that cost $100,000 and on which depreciation of $65,000 had accumulated. The firm carried no insurance of this loss. Plainview Corporation properly included the loss in the Continuing Operations section of the income statement.
(6) Plant and equipment transactions consisted of the sale of a building at its carrying value of $4,000 and the purchase of machinery for $28,000.
Exhibit 16.13:
(7) The firm wrote off accounts receivable as uncollectible totaling $16,300 in 2013 and $18,500 in 2014. It recognized expired insurance of $4,100 in 2013 and $3,900 in 2014.
(8) The subsidiary, which is 40% owned, reported a loss of $44,800 for 2014.
a. Prepare a T-account work sheet for Plainview Corporation for 2014 for preparing a statement of cash flows.
b. Prepare a formal statement of cash flows using the indirect method for the year ending December 31, 2014.
Transcribed Image Text:
Retained Earnings, December 31, 2013. .. $755,700 Add Net Income 236,580 $992,280 Subtotal ... Deduct: Cash Dividends..... Loss on Reissue of Treasury Stock $130,000 3,000 Stock Dividend .... 100,200 233,200 Retained Earnings, December 31, 2014. $759,080 Plainview Corporation Comparative Balance Sheets December 31, 2014 and 2013 (Problem 10) EXHIBIT 16.13 2014 2013 ASSETS $ 142,100 122,600 $ 165,300 129,200 Cash. Marketable Securities (at Fair Value) Accounts Receivable (Net) 312,200 371,200 Inventories 255,200 124,100 Prepayments 23,400 22,000 Bond Sinking Fund Investment in Subsidiary (at Equity) Plant and Equipment (Net).. Total Assets .... 63,000 134,080 152,000 1,443,700 $2,433,280 1,534,600 $2,561,400 SOURCES OF FINANCING Accounts Payable .. $ 238,100 $ 213,300 Notes Payable-Curent . 145,000 Accrued Payables 16,500 18,000 Income Taxes Payable 97,500 31,000 Deferred Income Taxes (Noncurrent). . 6% Mortgage Bonds Payable (Due 2022). 127,900 128,400 310,000 8% Debentures Payable (Due 2029) . Common Stock, $10 Par Value..... Additional Paid-In Capital 125,000 .... 1,033,500 950,000 67,700 51,000 ..... Accumulated Other Comprehensive Income Unrealized Holding Gain on Marketable Securities 2,500 2,500 759,080 (34,500) $2,433,280 Retained Earnings.... 755,700 Treasury Stock-at Cost of $3 per Share. Total Sources of Financing (43,500) $2,561,400 O Cenpage Leaming 2014
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