Prepare statement of cash flows using indirect method

Assignment Help Financial Accounting

Reference no: EM13173233

Financial information for Roberts Company at December 31, 2011, and for the year then ended, are presented below:

		Balance Sheet
			December 31,
			2011	2010
Cash			$ 31,000	$ 15,000
Accounts receivable			28,500	30,000
Allowance for doubtful accounts			(2,000)	(1,500)
Inventory			15,000	10,000
Prepaid insurance			1,400	2,400
Property, plant, and equipment			81,000	80,000
Accumulated depreciation			(16,000)	(20,000)
Land			81,100	40,100
	Total assets		$ 220,000	$ 156,000

Accounts payable			$ 11,000	$ 10,000
Wages payable			1,000	2,000
Interest payable			1,000	-
Notes payable, long-term			46,000	20,000
Common stock, nopar			136,000	100,000
Retained earnings			25,000	24,000
	Total liabilities and
	stockholders' equity		$ 220,000	$ 156,000


		Income Statement

	Sales revenue		$ 80,000
	Cost of goods sold		(35,000)
	Depreciation expense		(5,000)
	Bad debt expense		(1,000)
	Insurance expense		(1,000)
	Interest expense		(2,000)
	Salaries and wages expense		(12,000)
	Income tax expense		(3,000)
	Remaining expenses		(13,000)
	Loss on sale of operational assets		(2,000)
	Net income		$ 6,000

Additional information:

1. Wrote off $500 accounts receivable as uncollectible.

2. Sold an operational asset for $4,000 cash (cost, $15,000, accumulated depreciation, $9,000).

3. Issued common stock for $5,000 cash.

4. Declared and paid a cash dividend of $5,000.

5. Purchased land for $20,000 cash.

6. Acquired land for $21,000, and issued common stock as payment in full.

7. Acquired operational assets, cost $16,000; issued a $16,000, three-year, interest-bearing note payable.

8. Paid a $10,000 long-term note installment by issuing common stock to the creditor.

9. Borrowed cash on a long-term note, $20,000.

Required:

Prepare the statement of cash flows using the indirect method.

Cash $ 40,000

Accounts receivable 125,000

Inventory 75,000

Plant assets (net) 360,000

Total assets $600,000

Accounts payable $ 75,000

Accrued taxes and expenses payable 25,000

Long-term debt 100,000

Common stock ($10 par) 160,000

Paid-in capital in excess of par 40,000

Retained earnings 200,000

Total equities $600,000

Net sales (all on credit) $1,000,000

Cost of goods sold 750,000

Net income 90,000

Instructions

Compute the following: (It is not necessary to use averages for any balance sheet figures involved.)

(a) Current ratio

(b) Inventory turnover

(d) Book value per share

(e) Earnings per share

(f) Debt to total assets

(g) Profit margin on sales

(h) Return on common stock equity

Reference no: EM13173233

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