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Problem 12-2AA Indirect: Cash flows spreadsheet LO P1,P2, P3, P4 Forten Company , a merchandiser, recently completed its calendar-year 2013...
Problem 12-2AA Indirect: Cash flows spreadsheet LO P1,P2, P3, P4
Forten Company , a merchandiser, recently completed its calendar-year 2013 operations. 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 credit, (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. The company's balance sheets and income statement follow
FORTEN COMPANY
Comparative Balance Sheets
December 31, 2013 and 2012
Assets 2013 2012
Cash $ 49,600 $ 73,000
Accounts receivable 65,800 58,000
Merchandise inventory 277,500 252,000
Prepaid expenses 1,250 1,700
Equipment 158,000 108,000
Accum. depreciation Equipment (42,250) (52,000)
Total assets $ 509,900 $ 440,700
=========================
Liabilities and equity
Accounts payable $42,900 $113,000
short-term notes payable 11,000 6,000
Long-term note payable 70,000 48,500
Common stock, $5 par value 163,000 151,000
Paid-in capital in excess of par common stock 36,000 0
Retained earnings 187,000 122,200
Total liabilities and equity $509,900 $ 440,700
======================
FORTEN COMPANY
Income Statement
For Year Ended Dec. 31, 2013
Sales $ 582,000
Cost of goods sold 284,000
Gross profit 298,000
Operating expenses
Depreciation expense $20,000
Other expenses $132,800 152,800
___________
Other gains (losses)
Loss on sale of equipment (5,750)
_________
Income before taxes 139,450
Income taxes expense 24,250
_____________
Net Income $115,200
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Additional Information on Year 2013 Transactions
a. Net income was $115,200
b. Accounts receivable increased.
c Merchandise inventory increased.
d. Prepaid expenses decreased.
e. Accounts payable decreased.
f. Depreciation expense was $20,000.
g. Sold equipment costing $47,250, with accumulated depreciation of $29,750, for $11,750 cash. This yielded a loss of $5,750.
h. Purchased equipment costing $97,250 by paying $30,000 cash and (i.) by signing a long-term note payable for the balance
j. Borrowed $5,000 cash by signing a short-term note payable.
k. Paid $45,750 cash to reduce the long-term notes payable.
i. Issued 2,400 shares of common stock for $20 cash per share.
m. Declared and paid cash dividends of $50,400.
FORTEN COMPANY
Spreadsheet for Statement of Cash Flows
For Year Ended Dec. 31, 2013
Analysis of Changes
Dec 31, 2012 Debit Credit Dec 31, 2013
Balance sheet-debit balance acc.
Cash $ 73,000 $ 49,600
Accounts receivable 58,000
Merchandise inventoRY 252,000
Prepaid expenses 1,700
Equipment 108,000
__________
$492,700
==========
Balance sheet- credit balance acc.
Accum. depreciation-Equipment $52,000
Accounts payable 113,000
Short-term notes payable 6,000
Long-term notes payable 48,500
Common stock, $5 par value 151,000
Paid-in capital in excess of par value, 0
Retained earning 122,200
__________
$ 492,700
============
Statement of cash flows
Operating activities
Net income
Increase in account receivable
Increase increase merchandise inventory
Decrease in prepaid expenses
Decrease in accounts payable
Loss on sale of equipment
Investing activites
Receipt from sale of equipment
Payment to purchase equipment
Financing activities
Borrowed on short-term not
Payment on long-term note
Issued common stock for cash
Payments of cash dividends
Non cash investing and financing acctivities
Purchase of equipment financed by
long-term note payable
I NEED TO KNOW THE ANALYSIS OF CHANGE AND THE STATEMENT OF CASH FLOW. NOT JUST THE CASH FLOW!
