Final_Question4

Final_Question4 - OZARK CORPORATION Balance Sheet December...

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QUESTION 4 (30 points) Ozark Corporation reported sales of $1,200,000; gross profit of $420,000 ; selling and administrative costs of $320,000 ; interest expense of $18,000 ; and income taxes of $50,000. The selling and administrative expenses included $25,000 for depreciation . No equipment was sold during the year. Equipment purchases were made with cash. Prepaid insurance included in the balance sheet related to administrative costs. All accounts payable included in the balance sheet relate to inventory purchases. The change in retained earnings is attributable to net income and dividends. The increase in common stock and additional paid-in capital is due to issuing additional shares for cash. Using the indirect approach, prepare a statement of cash flows for Ozark for the year ending December 31, 20X5. Comparative balance sheets for Ozark follow.
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Unformatted text preview: OZARK CORPORATION Balance Sheet December 31, 20X4 and 20X5 20X5 20X4 Assets Cash $ 458,700 $ 471,450 Accounts receivable 199,250 171,500 Inventories 248,600 278,800 Prepaid insurance 13,000 11,000 Land 250,000 250,000 Building and equipment 1,500,000 1,300,000 Less: Accumulated depreciation (205,000) (180,000) Total assets $2,464,550 $ 2,302,750 Liabilities Accounts payable $ 85,700 $ 93,400 Interest payable 10,500 15,000 Income taxes payable 22,000 8,000 Stockholders' equity Common stock 710,000 700,000 Paid in capital in excess of par 990,000 900,000 Retained earnings 646,350 586,350 Total liabilities and equity $ 2,464,550 $ 2,302,750 Instruction: Prepare the statement of cash flow for OZARK CORPORATION, using indirect method....
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