Statement of Cash Flow
Not what you're looking for?
Problem 16-1B
Kite Corporation, a merchandiser recently completed its calendar year 2005. For the year (1) all sales are credit sales (2) all credits to accounts receivable reflect cash receipts from customers (3) all purchases of inventory are on credits, (4) all debits to accounts payable reflect cash payments for inventory and (5) other expenses are paid in advance and are initially debited to prepaid expenses. Kite's balance sheet and income statement follow: See attachment.
Additional Information on Year 2005 Transactions
a. The loss on the cash sale of equipment is $2,100 (details in b)
b. Sold equipment costing $51,000 with accumulated depreciation of $20,850, for $28,050 cash.
c. Purchased equipment costing $113,250 by paying $38,250 cash and signing a long-term note payable for the balance
d. Borrowed $6,000 cash by signing a short-term note payable
e. Paid $45,000 cash to reduce the long-term note payable.
f. Issued $3,000 shares of common stock for $11 cash per share.
g. Declared and paid cash dividends of $63,000
Required
1. Prepare a complete statement of cash flows: report its operation activities using the indirect method. Disclose any noncash investing and financing activities in a note.
2. Analyze and discuss the statement of cash flows prepared in part 1, giving special attention to the wisdom of the cash dividend payment.
Problem 16-2B
Refer to Kite Corporation's Financial statement and related information in problem 16-1B
Required Prepare a complete statement of cash flows: report its operating activities according to the direct method. Disclose any noncash investing and financing activities in a note.
Purchase this Solution
Solution Summary
The solution explains how to prepare a statement of cash flows using direct and indirect methods
Purchase this Solution
Free BrainMass Quizzes
Understanding the Accounting Equation
These 10 questions help a new student of accounting to understand the basic premise of accounting and how it is applied to the business world.
Marketing Research and Forecasting
The following quiz will assess your ability to identify steps in the marketing research process. Understanding this information will provide fundamental knowledge related to marketing research.
Cost Concepts: Analyzing Costs in Managerial Accounting
This quiz gives students the opportunity to assess their knowledge of cost concepts used in managerial accounting such as opportunity costs, marginal costs, relevant costs and the benefits and relationships that derive from them.
Change and Resistance within Organizations
This quiz intended to help students understand change and resistance in organizations
Motivation
This tests some key elements of major motivation theories.