Reference no: EM13546411
CASH FLOWS PROBLEM:
Kite Corporation, a merchandiser, recently completed its calendar-year 2011 operations. For theyear,
(1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cashreceipts 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. Prepare a statement of cash flows in good form.
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Joseph Corporation Comparative Balance Sheet December 31, 2011 and 2010
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Assets
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Cash
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$ 136,500.00
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$ 71,550.00
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Accounts Receivable
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$ 74,100.00
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$ 90,750.00
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Merchandise Inventory
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$ 454,500.00
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$ 490,200.00
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Prepaid Expenses
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$ 17,100.00
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$ 19,200.00
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Equipment
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$ 278,250.00
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$ 216,000.00
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Accumulated Depreciation $ (108,750.00) $ (93,000.00)
Total Assets $ 851,700.00 $ 794,700.00
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Liabilities and Equity
Accounts Payable
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$ 117,450.00
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$ 123,450.00
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Short-term Notes Payable
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$ 17,250.00
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$ 11,250.00
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Long-term Notes Payable
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$ 112,500.00
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$ 82,500.00
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Common Stock, $5 par
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$ 465,000.00
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$ 450,000.00
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Paid in Capital in excess
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$ 18,000.00
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Retained Earnings $ 121,500.00 $ 127,500.00
Total Liabilities & Equity $ 851,700.00 $ 794,700.00