29 Jun Retained earnings
Question
P13-9A Condensed financial data of sinjh Inc. follow.
Sinjh Inc.
Comparative Balance Sheets
December 31
Assets
2014 2013
Cash
$100,350 $ 48,400
Accounts receivable
92,800 33,000
Inventory
112,500 102,850
Prepaid expenses
29,300 26,000
Long-term investments
140,000 114,000
Plant assets
265,000 242,500
Accumulated depreciation
(47,000) (52,000)
Total
$692,950 $514,750
Liabilities and Stockholders’ Equity
Accounts payable
$112,000 $ 67,300
Accrued expenses payable
16,500 17,000
Bonds payable
110,000 150,000
Common stock
220,000 175,000
Retained earnings
234,450 105,450
Total ”
$692,950 $514,750
Sinjh Inc
Sales revenue
Gain on disposal of plant assets
$392,780
5,000
Less:
Cost of goods sold
135,460
Operating expenses, excluding
depreciation
12,410
Depreciation expense
45,000
Income tax expense
27,280
Interest expense
4,730 224,880
Net income
$172,900
Additional information:
1. New plant assets costing $80,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $57,500 and accumulated depreciation of $50,000 were sold for $12,500 cash.
3. Bonds payable matured and were paid off at face value for cash.
4. A cash dividend of $43,900 was declared and paid during the year,
Instructions
Prepare a statement of cash flows using the indirect method.
P13-10A – Data for Sigh Inc. are presented in P13-9A. Further analysis reveals that accounts payable pertains to Merchandise Creditors.
Prepare a statement of cash flows using the direct method.
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