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
0
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