Question : 162.The following information relates to Aires Corporation for 20×8 and : 1244241

 

162.The following information relates to Aires Corporation for 20×8 and 20×7:

 

Aires Corporation

Comparative Balance Sheets

December 31, 20×8 and 20×7

Assets

       20×8

       20×7

      Change

Cash

$    21,000

$    54,000

($ 33,000)

Accounts receivable (net)

421,000

480,000

(59,000)

Inventory

310,000

340,000

(30,000)

Prepaid expenses

17,000

15,000

2,000

Investments

80,000

80,000

0

Land

350,000

300,000

50,000

Building (net)

680,000

700,000

(20,000)

Equipment (net)

    520,000

    340,000

180,000

Total assets

$2,399,000

$2,309,000

$ 90,000

Liabilities

 

 

 

Accounts payable

$   328,000

$   335,000

($   7,000)

Accrued liabilities

171,000

170,000

1,000

Income taxes payable

22,000

34,000

(12,000)

Bonds payable

410,000

700,000

(290,000)

Long-term note payable

    130,000

              0

   130,000

Total liabilities

$1,061,000

$1,239,000

($178,000)

 

 

 

 

Stockholders’ Equity

 

 

 

Common stock

$  800,000

$  600,000

$200,000

Additional paid-in capital

152,000

152,000

0

Retained earnings

    386,000

    318,000

   68,000

Total stockholders’ equity

$1,338,000

$1,070,000

$268,000

Total liabilities and stockholders’ equity

$2,399,000

$2,309,000

$  90,000

 

Additional information:

Net income for 20×8 was $143,000.

Issued a long-term note payable in exchange for computer equipment for $130,000.

Purchased computer terminals for $90,000.

Depreciation on equipment for 20×8 was $40,000.

Depreciation on building for 20×8 was $20,000.

Reacquired bonds payable at par for $290,000.

Declared and paid dividends of $75,000.

Issued 20,000 shares of common stock at par value of $10 per share.

Paid $50,000 for land intended for a new plant site.

 

Prepare a statement of cash flows using the indirect method. Include a schedule of noncash investing and financing transactions, if applicable.

 

Aires Corporation

Statement of Cash Flows

For the Year Ended December 31, 20×8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

163.Use the following data for Tatum Music Company to prepare a statement of cash flows using the indirect method for the year ended June 30, 20×8.

 

Tatum Music Company

Income Statement

For the Year Ended June 30, 20×8

Sales

$350,000

Less expenses

 

Cost of goods sold

$200,000

 

 

Depreciation expense

20,000

 

 

Administrative expenses

52,000

 

 

Selling expenses

35,000

 

 

Loss on sale of investment

          500

   307,500

Income before income taxes

$  42,500

Income taxes expense

    10,000

Net income

 

$  32,500

 

Tatum Music Company

Comparative Balance Sheets

June 30, 20×8 and 20×7

Assets

       20×8

       20×7

Cash

$   4,500

$  15,000

Accounts receivable (net)

35,000

27,500

Inventory

40,000

50,000

Prepaid expenses

3,000

2,500

Long-term investments

20,000

25,000

Plant and equipment

80,000

40,000

Accumulated depreciation

  (20,000)

  (12,000)

Total assets

$162,500

$148,000

Liabilities

 

 

Accounts payable

$   2,000

$    6,000

Wages payable

220

260

Income taxes payable

780

740

Notes payable

    20,000

    12,000

Total liabilities

$ 23,000

$  19,000

 

 

 

Stockholders’ Equity

 

 

Common stock

$  58,000

$  65,000

Retained earnings

   81,500

   64,000

Total stockholders’ equity

$139,500

$129,000

Total liabilities and stockholders’ equity

$162,500

$148,000

 

Additional information:

A plant asset costing $20,000 was sold for its book value of $8,000.

A long-term investment was sold for $4,500.

The outstanding notes are long-term. An $8,000 note was issued during 20×8.

 

 

 

 

 

 

Tatum Music Company

Statement of Cash Flows

For the Year Ended June 30, 20×8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

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