Solution _Question4

Solution _Question4 - 1 Cash flow from operating activities...

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OaK Corperation Calculating The Net Income Balance Sheet Assets 20X5 20X4 differrence Gross Profit 420,000 Cash $458,700 $471,450 ($12,750) less Operating Expense 320,000 Accounts receivable 199,250 171,500 $27,750 Operating Income 100,000 Inventories 248,600 278,800 ($30,200) less Interest Expense 18,000 Prepaid insurance 13,000 11,000 $2,000 Net income 82,000 Land 250,000 250,000 $0 Building and equipment 1,500,000 1,300,000 $200,000 Less: Accumulated depreciation -205,000 -180,000 ($25,000) Liabilities Accounts payable $85,700 $93,400 ($7,700) Interest payable 10,500 15,000 ($4,500) Income taxes payable 22,000 8,000 $14,000 Stockholders' equity Common stock 710,000 700,000 $10,000 Paid in capital in excess of par 990,000 900,000 $90,000 Retained earnings 646,350 586,350 $60,000 Total liabilities and equity $2,464,550 $2,302,750 $161,800 *Note: ( Difference Column) No in Black Color: Positive No in Red Color: Negative
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Oak Company Statement of Cash Flow-Indirect Method For the year ended at December 31, 20X5
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Unformatted text preview: 1. Cash flow from operating activities Net income 82,000 Adjustments to reconcile net inome to net cash flow from operating activities. depreciation 25,000 Changes in current operating assets and liabilities increase in AR-27,750 decrease in Inventories 30,200 increase in Prepaid insurance-2,000 Decrease in AP-7,700 Decrease in Interest payable-4,500 Increase in Income tax payable 14,000 Net cash flow from operating activities 109,250 2. Cash flow from investing activities Cash paid to purchase: Builiding and Equipment ($200,000) Net cash flow from investing activities ($200,000) 3. Cash flow from financing activities Cash received from issuing the stock 100,000 less dividends 22,000 78,000 Net cash flow from the financing activities Decrease in cash ($12,750) Cash in the beginning of the year $471,450 Cash at the end of the year $458,700...
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This note was uploaded on 10/24/2011 for the course ECON 101 taught by Professor Abcd during the Fall '11 term at RMIT Vietnam.

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Solution _Question4 - 1 Cash flow from operating activities...

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