Fin/200 Cash Flow Preparation
Cash Flow Preparation
FIN/200
September 8, 2011
Axia College of University of Phoenix
WEEK 1 ASSIGNMENT – CASH FLOW PREPARATION 1. Prepare a statement of cash flows for the Widget Corporation. Follow the general procedures indicated in Table 2–10. ___________________________________________________________________
WIDGET CORPORATION
Income Statement
For the Year Ended December 31, 2008 Sales $2,200,000 Cost of goods sold 1,300,000 Gross profits 900,000 Selling and administrative expense 420,000 Depreciation expense 150,000 Operating income 330,000 Interest expense 90,000 Earnings before taxes 240,000 Taxes 80,000 Earnings after taxes 160,000 Preferred stock dividends 10,000 Earnings available to common stockholders $ 150,000 Shares outstanding 120,000 Earnings per share $ 1.25 Statement of Retained Earnings
For the Year Ended December 31, 2008 Retained earnings, balance, January 1, 2008 $500,000 Add: Earnings available to common stockholders, 2008 150,000 Deduct: Cash dividends declared and paid in 2008 50,000 Retained earnings, balance, December 31, 2008 $600,000
Comparative Balance Sheets
For 2007 and 2008 Year-End Year-End Assets 2007 2008
Current assets: Cash $ 70,000 $100,000 Accounts receivable (net) 300,000 350,000 Inventory 410,000 430,000 Prepaid expenses 50,000 30,000 Total current assets 830,000 910,000 Investments (long-term securities) 80,000 70,000 Plant and equipment 2,000,000 2,400,000 Less: Accumulated depreciation 1,000,000 1,150,000 Net plant and equipment 1,000,000 1,250,000 Total assets $1,910,000 $2,230,000
Liabilities and Stockholders’ Equity
Current liabilities: Accounts payable $ 250,000 $ 440,000 Notes payable 400,000 400,000 Accrued expenses 70,000 50,000 Total current liabilities 720,000 890,000
Long-term liabilities: Bonds payable, 2008 70,000
FIN/200
September 8, 2011
Axia College of University of Phoenix
WEEK 1 ASSIGNMENT – CASH FLOW PREPARATION 1. Prepare a statement of cash flows for the Widget Corporation. Follow the general procedures indicated in Table 2–10. ___________________________________________________________________
WIDGET CORPORATION
Income Statement
For the Year Ended December 31, 2008 Sales $2,200,000 Cost of goods sold 1,300,000 Gross profits 900,000 Selling and administrative expense 420,000 Depreciation expense 150,000 Operating income 330,000 Interest expense 90,000 Earnings before taxes 240,000 Taxes 80,000 Earnings after taxes 160,000 Preferred stock dividends 10,000 Earnings available to common stockholders $ 150,000 Shares outstanding 120,000 Earnings per share $ 1.25 Statement of Retained Earnings
For the Year Ended December 31, 2008 Retained earnings, balance, January 1, 2008 $500,000 Add: Earnings available to common stockholders, 2008 150,000 Deduct: Cash dividends declared and paid in 2008 50,000 Retained earnings, balance, December 31, 2008 $600,000
Comparative Balance Sheets
For 2007 and 2008 Year-End Year-End Assets 2007 2008
Current assets: Cash $ 70,000 $100,000 Accounts receivable (net) 300,000 350,000 Inventory 410,000 430,000 Prepaid expenses 50,000 30,000 Total current assets 830,000 910,000 Investments (long-term securities) 80,000 70,000 Plant and equipment 2,000,000 2,400,000 Less: Accumulated depreciation 1,000,000 1,150,000 Net plant and equipment 1,000,000 1,250,000 Total assets $1,910,000 $2,230,000
Liabilities and Stockholders’ Equity
Current liabilities: Accounts payable $ 250,000 $ 440,000 Notes payable 400,000 400,000 Accrued expenses 70,000 50,000 Total current liabilities 720,000 890,000
Long-term liabilities: Bonds payable, 2008 70,000