Additional information for 2014:
Depreciation expense was comprised of $6,000 for building
and $3,000 for equipment.
The company sold equipment with a book value of $7,000
(cost $8,000, less accumulated depreciation $1,000) for
$4,000 cash.
Issued $110,000 of long-term bonds in direct exchange for
land.
A building costing $120,000 was purchased for cash.
Equipment costing $25,000 was also purchased for cash.
Issued common stock for $20,000 cash.
The company declared and paid a $29,000 cash dividend.
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Deduct:
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Accounts Receivable
Debit Credit
Beg. 30,000
Sales 507,000 517,000 Cash collected from sales
End 20,000
Purchases
Beg. Inventory + Purchase - Ending Inventory = COGS
Purchase = COGS + Ending inventory - Beginnig Inventory
Purchase 155,000
Accounts Payable
Debit Credit
12,000 Beg.
Cash Paid 139,000 155,000 Purchases
28,000 End.
Operating Expense
Debit Credit
111,000
Prepaid expenses
Debit Credit
Beg. 1,000
Operating expense 111,000 4,000
End 5,000
Cash paid for oper 115,000
Income Tax payable
Debit Credit
8,000 Beg.
Cash Paid for Inco 49,000 47,000 Income Tax Expense
6,000 End/
Compuer Services Company
Cash Flow Statement (Indirect Method)
2014
Cash flow from Operating Activities Acc. Rec.
Debit Credit
Net Income 145,000 Beg 30,000
Depreciation Expense 9,000 Sales 507,000 ? Cash Collection
Loss on disposal of equp. 3,000 End 20,000
Decrease in Acc. Rec. 10,000
Increase in Inventory -5,000
Increase in Pre-Paid Expenses -4,000
Increase in Acc. Payable 16,000 Ret. Earnings
Decrease in Income T Payable -2,000 Debit Credit
Net Cash flow from Operating Activities 172,000 48,000 Beg.
Payment 29,000 145,000 Net Income
Cash flow from Investing Activities 164,000 End.
Purchase of a building -120,000
Purchase of Equipment -25,000
Sale of Equipment 4,000
Net Cash flow from Investing Activities -141,000
Cash flow from Financing Activities
Issue of Common Stock 20,000
Payment of Dividend -29,000
Net Cash Flow from Financing Activities -9,000
Net Cash flow 22,000
Beginning Cash Balance 33,000
Ending Cash Balance 55,000
Note:
Non cash transaction: Issuing bonds to buy land for 110,000
Cash flow Statement (Direct Method)
Cash flow from operating activities
Cash collected from sales 517,000
Cash paid for purchases/
Cash to suppliers (139,000)
Cash paid for operating expenses (115,000)
Cash paid for interest expenses (42,000)
Cash paid for income taxes (49,000)
Net cash provided by operating activities 172,000
Cash flow from operating activities
Cash flow from Investing Activities
Purchase of a building -120000
Purchase of Equipment -25000
Sale of Equipment 4000
Net Cash flow from Investing Activities -141000
Cash flow from Financing Activities
Issue of Common Stock 20000
Payment of Dividend -29000
Net Cash Flow from Financing Activities -9000
Net Cash flow 22000
Beginning Cash Balance 33000
Ending Cash Balance 55000
Note:
Non cash transaction: Issuing bonds to buy land for 110,000
Cash Collection
Net Income
