The scq corporation manufactures specialty medical tools

Reference no: EM13377219

The SCQ Corporation manufactures specialty medical tools ranging from $10,000 to$15,000 per unit. The tools are used in hospitals, clinics, and the home hospitality market. SCQ Corporation has contracted with YOUCPA to assist in creating its cash flow statement. In the past, its income statement and balance sheet have been prepared by the internal accountant.

It would like you to assist in preparing the cash flows using both the direct and indirect method. Sales and balance sheet information for the years 2009-2010 are below:

Balance Sheet SCQ Corporation For period ending 12/31/2010
Assets	2010	2009	Liabilities	2010	2009
Cash	150	100
Account receivable	600	400	Accounts payable	400	300
Inventory	750	500	Accrued taxes payable	200	100
Current assets	1,500	1,000	Current liabilities	600	400
Land	50	50
Equipment	1,300	1,200	Note payable	330	300
Less: Acc. depreciation	700	600	Deferred taxes	35	20
Net fixed assets	600	600	Equity:
Total fixed assets	650	650	Common stock	640	500
			Paid-in capital	80	80
			Retain earnings	465	350
			Total equity	1,185	930
Total assets	2,150	1,650	Total equity and liabilities	2,150	1,650

Income Statement SCQ Corporation For period ending 12/31/ 2010

Items	2010	2009
Revenue	1,000	900
Cost of goods sold	400	350
Gross profit	600	550
Wages expense	110	100
Interest expense	50	40
Depreciation expense	100	90
Insurance expense	50	50
Other misc. expenses	90	80
Total expenses	400	360
Operating income	200	190
Taxes:
Deferred taxes	15	20
Taxes expense	70	67
Net income after taxes	115	103
Additions to retains earnings	115	103

The information below can be used to complete the direct method of cash flow:

Cash flows from operating activities	2010
Cash receipts
Received from sales of goods	930
Paid for inventory	400
Paid for employees	110
Paid for interest	50
Paid for taxes	70
Paid for other expenses	320
Cash paid for equipment	100
Cash received for common stock	120
Cash received from note payable	30

Assignment Guidelines:

A. Indirect method cash flow/cash flow statement:
a. What is the operational cash flow?
b. What is the investing cash flow?
c. What is the financing cash flow?

B. Direct method cash flow:
a. What is the operational cash flow?
b. What is the investing cash flow?
c. What is the financing cash flow?

C. What are the differences in the cash flow concepts and procedures between the direct and indirect methods?

Reference no: EM13377219

Questions Cloud

Choose an item that you would like to manufacture you do : choose an item that you would like to manufacture. you do not actually need to manufacture something but will proceed

We have had periods in our history where our money has : we have had periods in our history where our money has received its value from different sources. what are commodity

Using the itt tech virtual library research information on : using the itt tech virtual library research information on companies that have engaged in monopoly behavior such as

The objective of the course project is to analyze the : the objective of the course project is to analyze the financial statements of a publicly traded company.obtain an

The scq corporation manufactures specialty medical tools : the scq corporation manufactures specialty medical tools ranging from 10000 to15000 per unit. the tools are used in

Assume you have been hired as a managing consultant by a : assume you have been hired as a managing consultant by a company to offer some advice that will help it make a decision

1 the owner of a small car-rental service is trying to : 1. the owner of a small car-rental service is trying to decide on the appropriate numbers of vehicles and mechanics to

A permanent endowment at the university of alabama is to : a permanent endowment at the university of alabama is to award scholarships to engineering students. the awards are to

Alternative r has a first cost of 100000 annual mampo costs : alternative r has a first cost of 100000 annual mampo costs of 50000 and a 20000 salvage value after 5 years.

User Account

All Pages