camelboi
May 3, 2011, 08:15 AM
Satu Co. a merchandiser, recently completed its 2008 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Recievable reflect cash reciepts from customers, (3) al purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, (5) Other Expenses are cash expenses, and (6) any change in Income Taxes Payable reflects the accrual and cash payment of taxes. Satu's balance sheets and income statement follow.
Satu Company
Comparative Balance Sheets
Dec. 31, 2008 and 2007
ASSETS... 2008 2007
Cash... $ 58,750 $ 26,400
Accounts Recievable... 20,222 25,860
Merchandise Inventory... 165,667 140,320
Equipment... 107,750 77,500
Accum. Depreciation-Equipment... (46,700) (31,000)
________________________
Total Assets... $305,689 $241,080
________________________
________________________
LIABILITIES AND EQUITY
Accounts payable... $20,372 $157,530
Income taxes payable... 2,100 6,100
Common stock, $5 par value... 40,000 25,000
Paid in capital in excess
of par, common stock... 68,000 20,000
Retained earnings... 175,217 32,450
__________________________
Total liabilities and equity... $305,689 $241,080
__________________________
__________________________
Satu Company
Income Statement
For the Year Ended Dec 31, 2008
Sales... $750,800
Cost of goods sold... 269,200
__________
Gross profit... 481,600
Operating expenses
Depreciation expenses... $15,700
Other expenses... 173,933 189,633
_________________________
Income before taxes... 291,967
income taxes expense... 89,200
__________
Net Income... $202,767
__________
__________
ADDITIONAL INFO ON YEAR 2008 TRANSACTIONS
a. Purchased equipment for $30,250 cash
b. Issued 3,000 shares of common stock for $21 cash per share
c. Declared and paid $60,000 of cash dividends
REQUIRED
Prepare a complete staement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method.
Satu Company
Comparative Balance Sheets
Dec. 31, 2008 and 2007
ASSETS... 2008 2007
Cash... $ 58,750 $ 26,400
Accounts Recievable... 20,222 25,860
Merchandise Inventory... 165,667 140,320
Equipment... 107,750 77,500
Accum. Depreciation-Equipment... (46,700) (31,000)
________________________
Total Assets... $305,689 $241,080
________________________
________________________
LIABILITIES AND EQUITY
Accounts payable... $20,372 $157,530
Income taxes payable... 2,100 6,100
Common stock, $5 par value... 40,000 25,000
Paid in capital in excess
of par, common stock... 68,000 20,000
Retained earnings... 175,217 32,450
__________________________
Total liabilities and equity... $305,689 $241,080
__________________________
__________________________
Satu Company
Income Statement
For the Year Ended Dec 31, 2008
Sales... $750,800
Cost of goods sold... 269,200
__________
Gross profit... 481,600
Operating expenses
Depreciation expenses... $15,700
Other expenses... 173,933 189,633
_________________________
Income before taxes... 291,967
income taxes expense... 89,200
__________
Net Income... $202,767
__________
__________
ADDITIONAL INFO ON YEAR 2008 TRANSACTIONS
a. Purchased equipment for $30,250 cash
b. Issued 3,000 shares of common stock for $21 cash per share
c. Declared and paid $60,000 of cash dividends
REQUIRED
Prepare a complete staement of cash flows; report its cash inflows and cash outflows from operating activities according to the indirect method.