Download Condensed financial data of Sinjh Inc. follow Sinjh Inc Comparative

Condensed financial data of Sinjh Inc. follow
Sinjh Inc
Comparative Balance Sheets
December 31
Assets
2012
2011
Cash
90800
48400
Accounts receivable
92800
33000
Inventory
112500
102850
Prepaid expenses
28400
26000
Investments
138000
114000
Plant assets
270000
242500
Accumulated depreciation
(50000)
(52000)
Total
682500
514750
Liabilities and Stockholders, Equity
Accounts payable
112000
67300
Accrued expenses
16500
17000
Bonds payable
110000
150000
Common stock
220000
175000
Retained earnings
224000
105450
Total
682500
514750
Income Statement
For the year ended December 31, 2012
Sales
392780
Less:
Cost of goods sold
135460
Operating expenses, excluding depreciation
12410
Depreciation expense
46500
Income taxes
27280
Interest expense
4730
Loss on Sale of plant assets
7500
233880
Net Income
158900
Additional information:
1New plant assets costing $85000 were purchased for
cash during the year.
2Old plant assets having an original cost of $57500 were
sold for $1500 cash.
3Bonds matured and were paid off at face value for cash.
4A cash dividend of $40350 was declared and paid during
the year.
Instruction:
Prepare a statement of cash flows using the indirect method.
Solution
2012
2011
Current Assets
Accounts receivable
Inventory
Prepaid expenses
Current Liabilities
Accounts payable
Accrued expenses
92800
112500
28400
33000
102850
26000
+
Less
59800
9650
2400
Add
44700
112000
67300
16500
17000
SINJH INC.
Statement of Cash Flows
For the Year Ended December 31, 2012
Cash flows from operating activities
Net income
Adjustments to reconcile net income to net
cash provided by operating activities
Depreciation expense
46500
Loss on sale of plant assets
7500
Increase in accounts payable
44700
Decrease in accrued expenses payable
(500)
Increase in prepaid expenses
(2400)
Increase in inventory
(9650)
Increase in accounts receivable
(59800)
Net cash provided by operating activities
Cash flows from investing activities
Sale of plant assets
Purchase of investments
Purchase of plant assets
Net cash used by investing activities
Cash flows from financing activities
Sale of common stock
Redemption of bonds
Payment of cash dividends
Net cash used by financing activities
Net increase in cash
Cash at beginning of period
Cash at end of period
Add
Less
500
158900
26350
185250
1500
(24000)
(85000)
(107500)
45000
(40000)
(40350)
(35350)
42400
48400
90800
SINJH INC.
Statement of Cash Flows
For the Year Ended December 31, 2012
Cash flows from operating activities
Cash receipts from customers
332980 (1)
Less cash payments:
To suppliers
100410
(2)
For income taxes
27280
For operating expenses
15310
(3)
For interest
4730
147730
Net cash provided by operating activities
185250
Cash flows from investing activities
Sale of plant assets
1500
Purchase of investments
(24000)
Purchase of plant assets
(85000)
Net cash used by investing activities
(107500)
Cash flows from financing activities
Sale of common stock
45000
Redemption of bonds
(40000)
Payment of cash dividends
(40350)
Net cash used by financing activities
(35350)
Net increase in cash
42400
Cash at beginning of period
48400
Cash at end of period
90800
Computations:
(1)
Cash receipts from customers
Sales
Deduct: Increase in accounts receivable
Cash receipts from customers
(2)
Cash payments to suppliers
Cost of goods sold
Add: Increase in inventory
Cost of purchases
Deduct: Increase in accounts payable
Cash payments to suppliers
(3)
Cash payments for operating
expenses
Operating expenses exclusive of depreciation
Add: Increase in prepaid expenses
Decrease in accrued expenses payable
392780
59800
332980
135460
9650
145110
44700
100410
12410
2400
500
Cash payment for operating expenses
15310