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A comparative balance sheet for Alcorn Company containing data for the last two years is as follows: Alcorn Company Comparative Balance Sheet This...

A comparative balance sheet for Alcorn Company containing data for the last two years is as follows:

Alcorn Company
Comparative Balance Sheet
This
Year Last
Year
Assets
Current assets:
Cash and cash equivalents $ 71,000 $ 50,000
Accounts receivable 590,000 610,000
Inventory 608,000 420,000
Prepaid expenses 10,000 5,000

Total current assets 1,279,000 1,085,000

Property, plant, and equipment 2,370,000 1,800,000
Less accumulated depreciation 615,000 560,000

Net property, plant, and equipment 1,755,000 1,240,000

Long-term investments 80,000 130,000

Loans to subsidiaries 120,000 70,000

Total assets
$ 3,234,000 $ 2,525,000

Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable $ 870,000 $ 570,000
Accrued liabilities 25,000 42,000
Income taxes payable 133,000 118,000

Total current liabilities 1,028,000 730,000
Bonds payable 620,000 400,000

Total liabilities 1,648,000 1,130,000

Stockholders’ equity:
Common stock 1,090,000 1,000,000
Retained earnings 496,000 395,000

Total stockholders’ equity 1,586,000 1,395,000

Total liabilities and stockholders' equity $ 3,234,000 $ 2,525,000


The following additional information is available about the company’s activities during this year:
a. The company declared and paid a cash dividend this year.
b. Bonds with a principal balance of $380,000 were repaid during this year.
c. Equipment was sold during this year for $70,000. The equipment had cost $130,000 and had $40,000 in accumulated depreciation on the date of sale.
d. Long-term investments were sold during the year for $110,000. These investments had cost $50,000 when purchased several years ago.
e. The subsidiaries did not repay any outstanding loans during the year.
f. Alcorn did not repurchase any of its own stock during the year.

The company reported net income this year as follows:

Alcorn Company
Income Statement
Sales $ 3,000,000
Cost of goods sold 1,860,000

Gross margin 1,140,000
Selling and administrative expenses
930,000

Net operating income 210,000
Nonoperating items:
Gain on sale of investments $ 60,000
Loss on sale of equipment 20,000 40,000

Income before taxes 250,000
Income taxes
80,000

Net income $ 170,000


Required:
1.

Using the indirect method, prepare a statement of cash flows for this year. (Amounts to be deducted should be indicated with a minus sign. Omit the "$" sign in your response.)

Alcorn Company
Statement of Cash Flows
Operating activities:
$
Adjustments to convert net income to cash basis:
$









Net cash operating activities
Investing activities:





Net cash investing activities
Financing activities:





Net cash financing activities


Cash balance, beginning

Cash balance, ending $

A comparative balance sheet for Alcorn Company containing data for the last two years is as follows: Alcorn Company Comparative Balance Sheet This Year Last Year Assets Current assets: Cash and cash equivalents $ 71,000 $ 50,000 Accounts receivable 590,000 610,000 Inventory 608,000 420,000 Prepaid expenses 10,000 5,000 Total current assets 1,279,000 1,085,000 Property, plant, and equipment 2,370,000 1,800,000 Less accumulated depreciation 615,000 560,000 Net property, plant, and equipment 1,755,000 1,240,000 Long-term investments 80,000 130,000 Loans to subsidiaries 120,000 70,000 Total assets $ 3,234,000 $ 2,525,000 Liabilities and Stockholders' Equity
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Current liabilities: Accounts payable $ 870,000 $ 570,000 Accrued liabilities 25,000 42,000 Income taxes payable 133,000 118,000 Total current liabilities 1,028,000 730,000 Bonds payable 620,000 400,000 Total liabilities 1,648,000 1,130,000 Stockholders’ equity: Common stock 1,090,000 1,000,000 Retained earnings 496,000 395,000 Total stockholders’ equity 1,586,000 1,395,000 Total liabilities and stockholders' equity $ 3,234,000 $ 2,525,000 The following additional information is available about the company’s activities during this year: a. The company declared and paid a cash dividend this year. b. Bonds with a principal balance of $380,000 were repaid during this year. c. Equipment was sold during this year for $70,000. The equipment had cost $130,000 and had $40,000 in accumulated depreciation on the date of sale. d. Long-term investments were sold during the year for $110,000. These investments had cost $50,000 when purchased several years ago. e. The subsidiaries did not repay any outstanding loans during the year. f. Alcorn did not repurchase any of its own stock during the year.
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