Question : 177. Based the information provided below for Krackle Corp., complete the : 1257722

 

177. Based on the information provided below for Krackle Corp., complete the following worksheet to be used to prepare the statement of cash flows using the indirect method. (a) Net income for the year was $30,000.(b) Dividends of $10,000 were declared and paid.(c) Krackle’s only noncash expense was depreciation which totaled $50,000.(d) The company purchased plant assets for $70,000.(e) Notes payable in the amount of $40,000 were issued during the year for cash.

  

Krackle Corporation

Spreadsheet for Statement of Cash Flows—Indirect Method

For Year Ended December 31, 2015

 

 

 

Analysis of Changes

 

 

12/31/14

 

Debit

 

Credit

12/31/15

Balance Sheet—Debits

 

 

 

 

 

 

   Cash……………………….

70,000

 

 

 

 

60,000

   Accounts receivable……………..

180,000

 

 

 

 

190,000

   Merchandise inventory……………

200,000

 

 

 

 

230,000

   Plant assets…………………..

500,000

 

 

 

 

   570,000

 

950,000

 

 

 

 

1,050,000

 

 

 

 

 

 

 

Balance Sheet—Credits

 

 

 

 

 

 

   Accumulated depreciation………….

100,000

 

 

 

 

150,000

   Accounts payable……………….

170,000

 

 

 

 

160,000

   Notes payable…………………

350,000

 

 

 

 

390,000

   Capital stock………………….

200,000

 

 

 

 

200,000

   Retained earnings……………….

130,000

 

 

 

 

   150,000

 

950,000

 

 

 

 

1,050,000

 

 

 

 

 

 

 

Statement of Cash Flows

 

 

 

 

 

 

  Operating activities………………

 

 

 

 

 

 

              Net income……………….

 

 

 

 

 

 

              Increase in accounts receivable……

 

 

 

 

 

 

              Increase in merchandise inventory…

 

 

 

 

 

 

              Decrease in accounts payable

 

 

 

 

 

 

              Depreciation expense…………

 

 

 

 

 

 

   Investing activities

 

 

 

 

 

 

              Cash paid to purchase plant assets….

 

 

 

 

 

 

   Financing activities

 

 

 

 

 

 

              Cash paid for dividends………..

 

 

 

 

 

 

              Cash received from note payable…..

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Krackle Corporation

Spreadsheet for Statement of Cash Flows—Indirect Method

For Year Ended December 31, 2015

 

 

 

Analysis of Changes

 

 

12/31/14

 

Debit

 

Credit

12/31/15

Balance Sheet—Debits

 

 

 

 

 

 

   Cash……………………….

70,000

 

 

 

 

60,000

   Accounts receivable………………

180,000

f

10,000

 

 

190,000

   Merchandise inventory……………

200,000

g

30,000

 

 

230,000

   Plant assets…………………..

500,000

d

70,000

 

 

   570,000

 

950,000

 

 

 

 

1,050,000

 

 

 

 

 

 

 

Balance Sheet—Credits

 

 

 

 

 

 

   Accumulated depreciation………….

100,000

 

 

c

50,000

150,000

   Accounts payable……………….

170,000

h

10,000

 

 

160,000

   Notes payable…………………

350,000

 

 

e

40,000

390,000

   Capital stock………………….

200,000

 

 

 

 

200,000

   Retained earnings……………….

130,000

b

10,000

a

30,000

   150,000

 

950,000

 

 

 

 

1,050,000

 

 

 

 

 

 

 

Statement of Cash Flows

 

 

 

 

 

 

  Operating activities………………

 

 

 

 

 

 

              Net income……………….

 

a

30,000

 

 

 

              Increase in accounts receivable……

 

 

 

f

10,000

 

              Increase in merchandise inventory….

 

 

 

g

30,000

 

              Decrease in accounts payable

 

 

 

h

10,000

 

              Depreciation expense…………

 

c

50,000

 

 

 

   Investing activities

 

 

 

 

 

 

              Cash paid to purchase plant assets….

 

 

 

d

70,000

 

   Financing activities

 

 

 

 

 

 

              Cash paid for dividends………..

 

 

 

b

10,000

 

              Cash received from note payable…..

 

e

40,000

 

 

 

 

 

 

 

 

 

 

 

 

 

250,000

 

250,000

 

 

 

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