luckyduck7688
Apr 8, 2008, 06:35 AM
This is possibly the biggest homework problem I've ever had to do. I'm not sure how to go about it. I've attached what little I've done of the statement of cash flows at the end.
Prepare a statement of cash flows for Blue Man Corp. for the year ended December 31, 2008, using the indirect method.
Cash 807,500 700,000 107,500
Accounts receivable 1,128,000 1,168,000 (40,000)
Inventories 1,850,000 1,715,000 135,000
Property, plant, and equipment 3,307,000 2,967,000 340,000
Accumulated depreciation (1,165,000) (1,040,000) (125,000)
Investment in Blige Co. 305,000 275,000 30,000
Loan receivable 262,500 --- 262,500
Accounts payable 1,015,000 955,000 60,000
Income taxes payable 30,000 50,000 (20,000)
Dividends payable 80,000 100,000 (20,000)
Capital lease obligation 400,000 --- 400,000
Capital stock, common, $1 par 500,000 500,000 ---
Additional paid-in capital 1,500,000 1,500,000 ---
Retained earnings 2,970,000 2,680,000 290,000
Additional information:
1. On December 31, 2007, Blue Man acquired 25% of Blige Co.'s common stock for $275,000. On that date, the carrying value of Blige's assets and liabilities, which approximated their fair values, was $1,100,000. Blige reported income of $120,000 for the year ended December 31, 2008. No dividend was paid on Blige's common stock during the year.
2. During 2008, Blue Man loaned $300,000 to TLC Co. an unrelated company. TLC made the first semi-annual principal repayment of $37,500, plus interest at 10%, on December 31, 2008.
3. On January 2, 2008, Blue Man sold equipment costing $60,000, with a carrying amount of $35,000, for $40,000 cash.
4. On December 31, 2008, Blue Man entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Blue Man made the first rental payment of $60,000 when due on January 2, 2009.
5. Net income for 2008 was $370,000
6. Blue Man declared and paid cash dividends for 2008 and 2007 as shown below:
2008 2007
Declared December 15, 2008 December 15, 2007
Paid February 28, 2009 February 28, 2008
Amount $80,000 $100,000
What I've done:
Blue Man Corp.
Statement of Cash Flows
For the Year Ended December 31, 2008
Cash flows from operating activities
Net income 370,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense 100,000
Loss on sale of equipment 5,000
Decrease in accounts receivable 40,000
Increase in inventories (135,000)
Increase in accounts payable 60,000
Decrease in income taxes payable (20,000)
Net cash provided (used) by operating activities
Cash flows from investing activities
Net cash provided (used) by investing activities
Cash flows from financing activities
Payment of dividends (20,000)
Payment under capital lease obligation (400,000)
Net cash provided (used) by financing activities
Net increase in cash 107,500
Cash at beginning of period 700,000
Cash at end of period 807,500
If anyone could help.. it would be greatly appreciated. :confused:
Prepare a statement of cash flows for Blue Man Corp. for the year ended December 31, 2008, using the indirect method.
Cash 807,500 700,000 107,500
Accounts receivable 1,128,000 1,168,000 (40,000)
Inventories 1,850,000 1,715,000 135,000
Property, plant, and equipment 3,307,000 2,967,000 340,000
Accumulated depreciation (1,165,000) (1,040,000) (125,000)
Investment in Blige Co. 305,000 275,000 30,000
Loan receivable 262,500 --- 262,500
Accounts payable 1,015,000 955,000 60,000
Income taxes payable 30,000 50,000 (20,000)
Dividends payable 80,000 100,000 (20,000)
Capital lease obligation 400,000 --- 400,000
Capital stock, common, $1 par 500,000 500,000 ---
Additional paid-in capital 1,500,000 1,500,000 ---
Retained earnings 2,970,000 2,680,000 290,000
Additional information:
1. On December 31, 2007, Blue Man acquired 25% of Blige Co.'s common stock for $275,000. On that date, the carrying value of Blige's assets and liabilities, which approximated their fair values, was $1,100,000. Blige reported income of $120,000 for the year ended December 31, 2008. No dividend was paid on Blige's common stock during the year.
2. During 2008, Blue Man loaned $300,000 to TLC Co. an unrelated company. TLC made the first semi-annual principal repayment of $37,500, plus interest at 10%, on December 31, 2008.
3. On January 2, 2008, Blue Man sold equipment costing $60,000, with a carrying amount of $35,000, for $40,000 cash.
4. On December 31, 2008, Blue Man entered into a capital lease for an office building. The present value of the annual rental payments is $400,000, which equals the fair value of the building. Blue Man made the first rental payment of $60,000 when due on January 2, 2009.
5. Net income for 2008 was $370,000
6. Blue Man declared and paid cash dividends for 2008 and 2007 as shown below:
2008 2007
Declared December 15, 2008 December 15, 2007
Paid February 28, 2009 February 28, 2008
Amount $80,000 $100,000
What I've done:
Blue Man Corp.
Statement of Cash Flows
For the Year Ended December 31, 2008
Cash flows from operating activities
Net income 370,000
Adjustments to reconcile net income to net
cash provided by operating activities:
Depreciation expense 100,000
Loss on sale of equipment 5,000
Decrease in accounts receivable 40,000
Increase in inventories (135,000)
Increase in accounts payable 60,000
Decrease in income taxes payable (20,000)
Net cash provided (used) by operating activities
Cash flows from investing activities
Net cash provided (used) by investing activities
Cash flows from financing activities
Payment of dividends (20,000)
Payment under capital lease obligation (400,000)
Net cash provided (used) by financing activities
Net increase in cash 107,500
Cash at beginning of period 700,000
Cash at end of period 807,500
If anyone could help.. it would be greatly appreciated. :confused: