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Comparative balance sheets and an income statement for 2008 are presented below for Nroklesah Company.

Comparative balance sheets and an income statement for 2008 are presented below for Nroklesah Company.
Comparative Balance Sheets and Income Statement
For the Years 2007 and 2008
BALANCE SHEETS
ASSETS
Year Year
2008 2007
Cash 200 185
Accounts receivable 350 290
Allowance for bad debts (45) (25)
Inventory 260 135
Land 600 500
Buildings 295 250
Accumulated depreciation-buildings
(65) (80)
Total assets 1,595 1,255

Liabilities & Owners' Equity
LIABILITIES
Accounts payable 400 305
Wages payable 70 67
Dividends payable 30 47
Taxes payable 50 46
Long-term Bonds payable
100 100
Discount on bonds payable
(8) (10)
Total liabilities: 642 555

Owners' Equity
Common stock 650 500
Retained earnings 303 200

Total owners' equity 953 700
Total liabilities & owners' equity
1,595 1,255

INCOME STATEMENT (2008)
Revenue
Cost of goods sold 1,200
Gross margin 750
= 450
Operating expenses
Wage expense 200
Depreciation expense 30
Bad debt expense 20
Bond interest expense 10
Total operating expenses 260
Net operating income 190
Gain on sale of building 40
Net income before tax 230
Income tax 69
Net income after tax............. 161

Additional information
1. There were no write-offs of delinquent accounts during the year.
2. A building was sold during the year for $80.

Required:
Prepare a cash flow statement for 2008 with clear documentation
(i.e., show your work) for each section of the statement. Use both the direct and indirect method.

For the most recent year (2008)
calculate the following ratios.
1. Current ratio
2. Inventory turnover
3. Rate of return on total assets
4. Accounts receivable turnover (assume all sales are on
account)
5. Debt ratio.

Top Answer

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529132_ACC.xls

Nroklesah Company Nroklesah Company Cash Flow Statement (Indirect method) Cash Flow Statement (Direct method) for the year ending December 31, 2008
Particluars Cash from Operating Activities Net...

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