200.Use the following financial statements and additional information to (1) prepare a statement of cash flows for the year ended December 31, 2015 using the indirect method, and (2) compute the company’s cash flow on total assets ratio for 2015.
Derby CompanyBalance SheetsAt December 31
20152014
Assets:
Cash$85,600$65,200
Accounts receivable, net72,85056,750
Merchandise inventory157,750144,850
Prepaid expenses6,08012,680
Equipment280,600245,600
Accumulated depreciation-Equipment (80,600) (97,600)
Total assets$522,280$427,480
Liabilities:
Accounts payable$52,850$45,450
Income taxes payable15,24012,240
Notes payable (long term) 59,200 79,200
Total liabilities$127,290$136,890
Equity:
Common stock200,000150,000
Paid-in capital in excess of par53,00040,000
Retained earnings 141,990100,590
Total equity$394,990$290,590
Total liabilities and equity$522,280$427,480
Derby CompanyIncome StatementFor Year Ended December 31, 2015
Sales $488,000
Cost of goods sold$212,540
Depreciation expense43,000
Other operating expenses106,260
Interest expense 6,400(368,200)
Other gains (losses):
Gain on sale of equipment 4,700
Income before taxes 124,500
Income taxes expense 41,100
Net income $83,400
Additional Information a. A $20,000 note payable is retired at its carrying value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $120,000 cash. d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700. e. Prepaid expenses relate to Other Expenses on the income statement. f. All purchases and sales of merchandise inventory are on credit.
201.Use the following financial statements and additional information to (1) prepare a complete statement of cash flows for the year ended December 31, 2013. The cash provided or used by operating activities should be reported using the direct method, and (2) compute the company’s cash flow on total assets ratio for 2015.
Derby CompanyBalance SheetsAt December 31
20152014
Assets:
Cash$85,600$65,200
Accounts receivable, net72,85056,750
Merchandise inventory157,750144,850
Prepaid expenses6,08012,680
Equipment280,600245,600
Accumulated depreciation-Equipment (80,600) (97,600)
Total assets$522,280$427,480
Liabilities:
Accounts payable$52,850$45,450
Income taxes payable15,24012,240
Notes payable (long term) 59,200 79,200
Total liabilities$127,290$136,890
Equity:
Common stock200,000150,000
Paid-in capital in excess of par53,00040,000
Retained earnings 141,990100,590
Total equity$394,990$290,590
Total liabilities and equity$522,280$427,480
Derby CompanyIncome StatementFor Year Ended December 31, 2015
Sales $488,000
Cost of goods sold$212,540
Depreciation expense43,000
Other operating expenses106,260
Interest expense 6,400(368,200)
Other gains (losses):
Gain on sale of equipment 4,700
Income before taxes 124,500
Income taxes expense 41,100
Net income $83,400
Additional Information a. A $20,000 note payable is retired at its carrying value in exchange for cash. b. The only changes affecting retained earnings are net income and cash dividends paid. c. New equipment is acquired for $120,000 cash. d. Received cash for the sale of equipment that had cost $85,000, yielding a gain of $4,700. e. Prepaid expenses relate to Other Expenses on the income statement. f. All purchases and sales of merchandise inventory are on credit.
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