Statement of Cash Flow

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Balance Sheet
Fiscal 2004
PRIOR YEAR CURRENT YEAR

Current Assets
CASH $519,200 $480,000
MARKETABLE SECURITIES $185,000 $200,000
ACCOUNTS RECEIVABLES $138,000 $406,000
INVENTORIES $1,135,000 $1,285,000
PREPAID INSURANCE $29,400 $23,510
OTHER CURRENT ASSETS $95,400 $229,300
$2,102,000 $2,623,810 $560,900

INVESTMENTS $165,000 $-

Plant Assets and Goodwill
LAND $500,000 $500,000
BUILDING $1,490,000 $1,850,000
MACHINERY & EQUIPMENT $1,378,000 $978,000
LEASEHOLD IMPROVEMENTS $302,000 $302,000
GOODWILL $440,000 $400,000
Less ACCUM. DEPRECIATION $(987,000) $(445,000)
$3,123,000 $3,585,000

Total Assets $5,390,000 $6,208,810

Current Liabilities
allowance for doubtful acct. $21,000 $22,000
ACCOUNTS PAYABLE $115,000 $386,000
SALARIES PAYABLE $92,000 $76,960
INCOME TAX PAYABLE $265,000 $223,650
DEFERRED TAXES $245,000 $165,000
OTHER CURRENT LIABILITIES $485,000 $349,500
$1,223,000 $1,223,110

BONDS PAYABLE, DUE 2028 $- $429,000
PREFERRED STOCK, $100 PAR $800,000 $800,000

Stockholder's Equity
COMMON STOCK $477,000 $607,500
RETAINED EARNINGS $2,890,000 $3,149,200 =2890000+ 639200-380000

Total Liabilities and Owner's equity $5,390,000 $6,208,810

Note (Retained income for current year = Previous year's retained income + Net Income for the year - Dividends paid)

PRIOR FACTS

A)        THE COMPANY SOLD 65,250 SHARES OF STOCK FOR $130,500
B)        THE COMPANY PAID PREFERRED DIVIDENDS OF $64,000
C)        THE COMPANY PAID COMMON DIVIDENDS OF $316,000
D)        THE COMPANY'S NET INCOME WAS $639,200

NEW DATA:

E) DURING THE YEAR THE COMPANY SOLD A BUILDING COSTING $580,000 WITH ACCUM. DEPRECIATION OF $580,000 FOR $200,000.

F) DURING THE YEAR THE COMPANY SOLD EQUIPMENT FOR $100,000. IT COST $400,000 AND HAD ACCUM. DEPRECIATION OF $330,000. THE

G) THE COMPANY SOLD INVESTMENTS FOR $180,000. THEY COST $165,000.

H) THE COMPANY PURCHASED A BUILDING FOR $940,000 AND ISSUED BONDS FOR $429,000.

I) THE ABOVE INFORMATION DOES NOT REQUIRE YOU TO CHANGE ANYTHING ON THE INCOME STATEMENT. IEMS "E" THRU "H" ARE PRESENTED ONLY TO HELP YOU PREPARE THE CASH FLOW STATEMENT.

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Solution Summary

The expert prepares a statement of cash flow. The balance sheets for current assets are given.

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