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    Caribou Statement of Cash Flows with related footnote

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    The following information was taken from the accounting records of the Caribou Company:
    Account Balances
    January 1, 2010 December 31, 2010
    Cash $ 1,400 $ 2,400
    Accounts receivable (net) 2,800 2,690
    Marketable securities (at cost) 1,700 3,000
    Allowance for change in value 500 800
    Inventories 8,100 7,910
    Prepaid items 1,300 1,710
    Investments (long-term) 7,000 5,400
    Land 15,000 15,000
    Buildings and equipment 32,000 46,200
    Discount on bonds payable ----- 290
    $69,800 $85,400

    Accumulated depreciation $ 16,000 $ 16,400
    Accounts payable 3,800 4,150
    Income taxes payable 2,400 2,504
    Wages payable 1,100 650
    Interest payable ----- 400
    Note payable (long-term) 3,500 -----
    12% bonds payable ----- 10,000
    Deferred taxes payable 800 1,196
    Convertible preferred stock, $100 par 9,000 -----
    Common stock, $10 par 14,000 21,500
    Additional paid-in capital 8,700 13,700
    Unrealized increase in value of marketable securities 500 800
    Retained earnings 10,000 14,100
    $69,800 $85,400

    Additional information for the year:
    a) Sales $ 39,930
    Cost of goods sold (19,890)
    Depreciation expense (2,100)
    Wages expense (11,000)
    Other operating expenses (1,000)
    Bond interest expense (410)
    Dividend revenue 820
    Gain on sale of investments 700
    Loss on sale of equipment (200)
    Income tax expense (2,050)
    Net income $ 4,800

    b) Dividends declared and paid totaled $700.
    c) On January 1, 2010, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion.
    d) Long-term nonmarketable investments that cost $1,600 were sold for $2,300.
    e) The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year.
    f) Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets.
    g) Equipment was purchased at a cost of $16,200.
    h) The 12% bonds payable were issued on August 31, 2010 at 97. They mature on August 31, 2020. The company uses the straight-line method to amortize the discount.
    i) Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable.
    J) Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.


    Prepare the statement of cash flows (US GAAP) for Caribou complete with related footnote disclosures.

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    Your tutorial is attached in Excel and the amounts have computations in each ...

    Solution Summary

    Your tutorial is attached in Excel and the amounts have computations in each cell (click to see) so you can see how this was built. There would be two footnote disclosures and these are indicated for you. There is an additional comment about how the unrealized gain on marketable securities should be handled.