Question : 158. The comparative balance sheet of Colson Company, for 2011 and : 1226774

 

158. The comparative balance sheet of Colson Company, for 2011 and the preceding year ended December 31, 2010 appears below in condensed form: 

 

Year

Year

 

2011

2010

 

 

 

Cash

$  45,000 

$  53,500 

Accounts receivable (net)

51,300 

58,000 

Inventories

147,200 

135,000 

Investments

0 

60,000 

Equipment

493,000 

375,000 

Accumulated depreciation-equipment

(113,700)

(128,000)

 

$622,800 

$553,500 

Accounts payable

$  61,500 

$  42,600 

Bonds payable, due 2014

0 

100,000 

Common stock, $10 par

250,000 

200,000 

Paid-in capital in excess of par–

 

 

  common stock

75,000 

50,000 

Retained earnings

  236,300 

  160,900 

 

$622,800 

$553,500 

 

 

 

The income statement for the current year is as follows: 

Sales

 

$623,000 

Cost of merchandise sold

 

  348,500 

Gross profit

 

$274,500 

Operating expenses:

 

 

  Depreciation expense

$24,700

 

  Other operating expenses

  75,300

  100,000 

Income from operations

 

$174,500 

Other income:

 

 

  Gain on sale of investment

$  5,000

 

Other expense:

 

 

  Interest expense

  12,000

     (7,000)

Income before income tax

 

$167,500 

Income tax

 

    64,100 

Net income

 

$103,400 

 

 

 

Additional data for the current year are as follows: 

(a)

Fully depreciated equipment costing $39,000 was scrapped, no salvage, and equipment was purchased for $157,000.

(b)

Bonds payable for $100,000 were retired by payment at their face amount.

(c)

5,000 shares of common stock were issued at $15 for cash.

(d)

Cash dividends declared were paid $28,000.

(e)

All sales are on account.

 

 

Prepare a statement of cash flows, using the direct method of reporting cash flows from operating activities. 

 

 

 

159. The cash flows from operating activities are reported by the direct method on the statement of cash flows.  Determine the following: 

(a)

If sales for the current year were $475,000 and accounts receivable increased by $39,000 during the year, what was the amount of cash received from customers?

(b)

If income tax for the current year was $39,000 and income tax payable decreased by $11,000 during the year, what was the amount of cash payments for income tax?

 

 

 

 

160. Selected data for the current year ended December 31 are as follows: 

 

Balance

Balance

 

December 31

January 1

Accrued expenses (operating expenses)

$29,500

$  22,000

Accounts payable (merchandise creditors)

90,000

135,000

Inventories

42,500

68,000

Prepaid expenses

23,000

20,000

 

 

 

During the current year, the cost of merchandise sold was $620,000 and the operating expenses other than depreciation were $142,000.  The direct method is used for presenting the cash flows from operating activities on the statement of cash flows.Determine the amount reported on the statement of cash flows for (a) cash payments for merchandise and (b) cash payments for operating expenses.