B-16.13 Problem

B-16.13 Problem - reconciliation of net income to operating...

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B-16.13 Ozark Corporation reported net income of $100,000 for 20X5. The income statement revealed sales of $1,000,000; gross profit of $520,000; selling and administrative costs of $340,000; interest expense of $20,000; and income taxes of $60,000. 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 direct approach, prepare a statement of cash flows (excluding the supplemental
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Unformatted text preview: reconciliation of net income to operating cash flow) for Ozark for the year ending December 31, 20X5. Comparative balance sheets for Ozark follow. 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 $...
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This note was uploaded on 02/29/2012 for the course ACCOUNTING 101 taught by Professor Hudack during the Spring '11 term at FIU.

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