Download and review the income sta

29 Jun Download and review the income sta

QuestionDownload and review the income sta
Download and review the income statement for the Country Vista Company. You will use the income statement to help you complete Part 1 and Part 2 below.

· Country Vista Income Statement

Country Vista Company

Income Statement

For the Year Ended December 31, 2011

Sales

$2,48,000

Cost of Goods Sold

$1,16,000

Gross Profit

$1,32,000

Operating Expenses

Wages and Salaries Expense

$44,000

Rent Expense

$16,000

Depreciation Expense

$30,000

Other Operating Expenses

$18,000

$1,08,000

Income from Operations

$24,000

Gain on Sale of Equipment

$26,000

Income before Income Taxes

$50,000

Income Tax Expense

$17,500

Net Income

$32,500

Part 1: Indirect Method

Using Excel, prepare the Statement of Cash Flows Indirect Method. Your SOCF should be based upon the income statement and the additional information below:

Additional Information:

· Increase in Accounts Receivables=$4,000

· Increase in Accounts Payables=$16,000

· Increase in Income Taxes Payable=$300

· Decrease in Prepaid Expenses=$10,000

· Decrease in Merchandise Inventory=$14,000

· Decrease in Long Term Notes Payable=$20,000

· Cash Paid to Purchase Land=$50,000

· Cash Paid to Purchase Equipment=$15,000

· Cash Paid to Retire Bonds=$25,000

· Cash Paid to for Dividends=$10,000

· Cash Received from the Sale of common stock=$50,000

· Cash at the start of the year=$24,000

Part 2: Direct Method

Using Excel and the below information please prepare the complete statement of cash flows using the direct method.

Additional Information:

· Cash Received from Customers=$80,000

· Cash Payments for Merchandise=$10,000

· Cash Payments for Operating Expenses=$5,000

· Cash payments for Interest=$6,000