Question: Financial statements for McDowell Company as well
Financial Statements for McDowell Company as well as additional information relevant to cash flows during the period are given on pages 926–927.
Additional information:
1. Store equipment was sold in 20-2 for $25,000. Additional information on the store equipment sold is provided below.
Cost ………………………………………………………………… $ 70,000
Accumulated depreciation ………………………………….. (30,000)
Book value………………………………………………………… $ 40,000
Market value ………………………………………………………..25,000
Loss on sale………………………………………………………. $ 15,000
2. Depreciation expense for the year was $112,000.
3. The following purchases were made for cash:
Store equipment ……………………………………………. $ 64,000
Delivery equipment ………………………………………….140, 000
Office equipment ……………………………………………..30,000
$234,000
4. Declared and paid cash dividends of $60,000.
5. Issued 10,000 shares of $10 par common stock for $14 per share.
6. Acquired additional store equipment by issuing a note payable for $16,000.
REQUIRED
Prepare a statement of cash flows explaining the change in cash and cash equivalents for the year ended December 31, 20-2.
Transcribed Image Text:
McDowell Company Income Statement For Year Ended December 31, 20-2 Net sales Cost of goods sold Gross profit $1,890,000 940,000 $ 950,000 Operating expenses 572,300 Operating income $ 371 J00 Other revenues and expenses: Interest revenue $ 3,900 Interest expense Loss on sale of store equipment Income before taxes Income tax expense Net income (890) (11,9900 $ 365,710 133,000 $ 232710 (15,000) McDowell Company Statement of Retained Earmings For Year Ended December 31, 20-2 Retained eamings, lanuary 1, 20-2 Net income Less dividends Net increase in retained earnings Retained eamings, December 31, 20-2 $360,000 $232,710 60,000 172,710 $532,710 McDowell Company Comparative Balance Sheet December 31, 20-2 and 20-1 IKEE DECIEVE 20-2 2-1 Assets urrent assets: $ 75,365 $ 4035 $ 35,040 Cash Government notes 6,800 18,000 (11,200) Accrued interestreceivable 720 610 110 Acounts receivable (net) 310,700 325,800 (15,100) 145,200 Merchandise inventory 685,400 540,200 Suppies and prepayments 27,000 9,000 (12,000) Total curent assets $1,105,985 $ 963,935 142,050 Property, plant, and equipment Store equipment $470,000 SA60,000 10,000 Lessaccumulated depredation-store equipment 180,000 $530,000 30,000 140,000 20,000 150,000 $390,000 310,000 Delivery equipment Lessaccumulated deprediation-delivery equipment Office equipment Lessaccumulated deprediation-office equipment Total property, plant and equipment Total assets 140,000 390,000 100,000 20,000 40,000 30,000 12,000 98,000 $430,000 S400,000 88,000 342,000 76,000 324,000 $ 24,000 $1,87,935 $1,022000 $2,127985 240,050 Liabilities Current liabilities: Notes payable Acounts payatle Income taxpayable Accrued and withhekd payroll taes Accrued interestpayable $118,000 $102,000 16,000 (8S 00) 110,000 195,000 20,000 16,400 25,000 14,900 (5,000) 1,500 875 1,035 (160) Total curent iabilities $ 265,275 $ 337,935 (72,60) Stockholders' Equity Common stock ($10 pa, 300,000 shares authorized; ksued: 90,000 in 20-2 and 80,000 in 20-1) $900,000 $800,000 390,000 360,000 100,000 Paid-in capital in excessof par-common stock Retained earrings Total stodholders equity Total liabilties and Stockholders' Equity 430,000 40,000 532,710 1,862,710 $2,127,985 1,550,000 $1,87,935 172,710 312710 240,050
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