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Fill-in Missing Amounts - Financial Statements

The chief accountant for Grandview corporation provides you with the company's 2011 statement of cash flows and income statement. The accountant has asked for your help with some missing figures in the company's comparative balance sheets. These financial statements are shown next ($ in millions).
Grandview Corporation
Statement of cash flows
For the Year Ended December 31, 2011
Cash flows from operating activities
Collections from customers $71
Payment to suppliers (30)
Payment of general & administrative expenses (18)
Payment of income taxes (9)
___
Net cash flows from operating activities 14
Cash flow
Sale of investments 65

Cash flows from financing activities
Issuance of common stock 10
Payment of dividends 3
_
Net cash flows from financing activities 7

Net increase in cash 86

Grandview Corporation
Statement of cash flows
For the Year Ended December 31, 2011

Sales revenue $80
Cost of good sold 32
__
Gross profit 48
Operating expenses:
General and administrative $18
Depreciation 10
___
Total operating 28
Operating income 20
Other income:
Gain on sale of investments 15
Income before income taxes 35
Income tax expense 7
Net income $28

Grandview Corporation
Balance sheets
At December 31
2011 2010
________________________________________________________________________
Assets:
Cash $145 ?
Accounts receivable ? 84
Investments ___ 50
Inventory 60 ?
Property, plant & equipment 150 150
Less: accumulated depreciation (65) ?
Total assets ? ?

Liabilities and shareholders' equity:
Accounts payable to suppliers $40 $30
Payables for selling & admin. Expenses 9 9
Income taxes payable 22 ?
Common stock 240 230
Retained earnings ? ?

Total liabilities and shareholders' equity ? ?

Required

1. Calculate the missing amounts.
2. Prepare the operating activities section of Grandview's 2011 statement of cash flows using the indirect method.

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Solution Summary

To demonstrate the relationship between the financial statements, this solution illustrates how to use two of the basic financial statements to derive balances for the third.

$2.19