Explore BrainMass

Statement of Cash Flows

This content was STOLEN from BrainMass.com - View the original, and get the already-completed solution here!

Please provide assistance in recording land and stock activity on the statement of cashflows using the indirect method.

Statement of Cash Flows, Indirect Method
Following are an income statement for Boulder Hill, Inc., for the year ended December
31, 2004, and the company's balance sheets as of December 31, 2003 and 2004.
Boulder Hill, Inc.
Balance Sheets
December 31, 2003 and 2004
2003 2004
Cash $ 12,100 $ 36,500
Accounts Receivable 10,600 12,700
Inventory 14,700 13,000
Prepaid Expenses 1,300 700
Total Current Assets $ 38,700 $ 62,900
Equipment $ 52,000 $ 52,000
Less: Acc. Depreciation (16,300) 35,700 (22,000) 30,000
Investment in Land 5,100 ______
Total Assets $ 79,500 $ 92,900
Accounts Payable $ 7,100 $ 5,200
Accrued Liabilities 3,300 3,700
Total Current Liab. $ 10,400 $ 8,900
Common Stock $ 4,500 $ 4,800
Additional PIC 18,200 20,300
Retained Earnings 46,400 58,900
Total SE 69,100 84,000
Total Liabilities and SE $ 79,500 $ 92,900
Boulder Hill, Inc.
Income Statement
For the Year Ended December 31, 2004
Sales $ 92,900
Cost of Goods Sold (36,800)
Gross Profit $ 56,100
Operating Expenses:
Selling & General Expenses $14,600
Depreciation Expense 5,700 (20,300)
Operating Income $ 35,800
Loss on Sale of Land (2,500)
Income before Income Tax $ 33,300
Income Tax Expense (13,300)
Net Income $ 20,000
The prepaid expenses and accrued liabilities included in Boulder Hill's balance
sheets involve selling or administrative (operating) expenses. All of Boulder Hill's
sales and merchandise purchases are made on credit. Following is additional financial
information obtained from Boulder Hill's accounting records for 2004.
(a) Collections of accounts receivable $90,800
(b) Purchases of merchandise 35,100
(c) Payments of accrued (operating) liabilities 3,300
(d) Payments of operating expenses 9,600
(e) Prepayments of operating expenses 700
(f) Expiration of prepaid (operating) expenses 1,300
(g) Payments to suppliers 37,000
(h) Proceeds from sale of land 2,600
(i) Sale of 300 shares of $1 par value common
stock for $8 per share 2,400
(j) Declaration and payment of cash dividends
on common stock 7,500
(k) Payment of 2004 income taxes 13,300
(l) Accrual of unpaid operating expenses at year-end 3,700
(m) Year-end adjusting entry to record depreciation
expense on equipment 5,700
Prepare a statement of cash flows for Boulder Hill for the year ended December 31,
2004, using the indirect method.

© BrainMass Inc. brainmass.com October 24, 2018, 7:53 pm ad1c9bdddf


Solution Preview

Please see the attached file

Most of the other information ...

Solution Summary

The solution explains how to prepare a statement of cash flows using the indirect method for Boulder Hill

See Also This Related BrainMass Solution

Statement of Cash Flows: Time for change! SFAS No. 95

See attached file.

As contained in the Week Four electronic reserve readings article readings, this article, Broome, O. W. (2004, March/April). Statement of cash flows: Time for change! Financial Analysts Journal, 60(2), 16. , describes the current SFAS No. 95 requirements for the statement of cash flows, cites recent cases of abuse and disinformation involving the statement, and makes significant recommendations for improving the statement. Based on the comments in the article do you think the three sections of the statement of cash flows provide enough information for the reader? Of the three which provides the most information or is this an 'it depends' answer?

View Full Posting Details