Alpha Geek

(8)

$10/per page/Negotiable

About Alpha Geek

Levels Tought:
University

Expertise:
Accounting,Algebra See all
Accounting,Algebra,Architecture and Design,Art & Design,Biology,Business & Finance,Calculus,Chemistry,Communications,Computer Science,Environmental science,Essay writing,Programming,Social Science,Statistics Hide all
Teaching Since: Apr 2017
Last Sign in: 441 Weeks Ago, 1 Day Ago
Questions Answered: 9562
Tutorials Posted: 9559

Education

  • bachelor in business administration
    Polytechnic State University Sanluis
    Jan-2006 - Nov-2010

  • CPA
    Polytechnic State University
    Jan-2012 - Nov-2016

Experience

  • Professor
    Harvard Square Academy (HS2)
    Mar-2012 - Present

Category > Accounting Posted 16 May 2017 My Price 15.00

The comparative balance sheets for Sharma Fabrics, Inc

The comparative balance sheets for Sharma Fabrics, Inc., for December 31, 20x7 and 20x6 appear on the oposite page. Additional information about Sharma Fabrics’s operations during 20x7 is as follows: (a) net income, $56,000; (b) building and equipment depreciation expense amounts, $30,000 and $6,000, respectively; (c) equipment that cost $27,000 with accumulated depreciation of $25,000 sold at a gain of

$10,600; (d) equipment purchases, $25,000; (e) patent amortization, $6,000; purchase of patent, $2,000; (f) funds borrowed by issuing notes payable, $50,000; notes payable repaid, $30,000; (g) land and building purchased for $324,000 by signing a mortgage for the total cost; (h) 3,000 shares of $20 par value common stock issued for a total of $100,000; and (i) paid cash dividend, $18,000.

Required

1. Using the indirect method, prepare a statement of cash flows for Sharma Fabrics, Inc.

2. User Insight: Why did Sharma Fabrics have an increase in cash of $134,400 when it recorded net income of only $56,000? Discuss and interpret.

3. User Insight: Compute and assess cash flow yield and free cash flow for 20x7. What is your assessment of Sharma’s cash-generating ability?

 

 

Sharma Fabrics, Inc.

Comparative Balance Sheets

December 31, 20x7 and 20x6

 

20x7

20x6

 

Assets

 

Cash

$189,120

$ 54,720

Accounts receivable (net)

204,860

150,860

Inventory

225,780

275,780

Prepaid expenses

—

40,000

Land

50,000

—

Building

274,000

—

Accumulated depreciation, building

(30,000)

—

Equipment

66,000

68,000

Accumulated depreciation, equipment

(29,000)

(48,000)

Patents

8,000

12,000

Total assets

$958,760

$553,360

 

Liabilities and Stockholders’ Equity

Accounts payable

$ 21,500

$ 73,500

Notes payable (current)

20,000

—

Accrued liabilities

—

24,600

Mortgage payable

324,000

—

Common stock, $10 par value

360,000

300,000

Additional paid-in capital

114,400

74,400

Retained earnings

118,860

80,860

Total liabilities and stockholders’ equity

$958,760

$553,360

 

 

Answers

Alpha Geek
(8)
Status NEW Posted 16 May 2017 10:05 AM My Price 15.00

-----------

Attachments

file 1494930950-857910_1_636304465269152295_Cash-flow-indirect.xlsx preview (461 words )
85-----------791-----------0&a-----------mp;-----------amp-----------;in-----------foI-----------d=1-----------021-----------46S-----------tat-----------eme-----------nt -----------of -----------cas-----------h f-----------low-----------s-I-----------ndi-----------rec-----------tTh-----------e c-----------omp-----------ara-----------tiv-----------e b-----------ala-----------nce----------- sh-----------eet-----------s f-----------or -----------Sha-----------rma----------- Fa-----------bri-----------cs,----------- In-----------c.,----------- fo-----------r D-----------ece-----------mbe-----------r 3-----------1, -----------20x-----------7 a-----------nd -----------20x-----------6 a-----------ppe-----------ar -----------on -----------the----------- op-----------pos-----------ite----------- pa-----------ge.-----------: -----------Sha-----------rma----------- Fa-----------bri-----------cs,----------- In-----------c.C-----------omp-----------ara-----------tiv-----------e B-----------ala-----------nce----------- Sh-----------eet-----------sDe-----------cem-----------ber----------- 31-----------, 2-----------0x7----------- an-----------d 2-----------0x6-----------20x-----------720-----------x6A-----------sse-----------ts$-----------Cas-----------hAc-----------cou-----------nts----------- re-----------cei-----------vab-----------le -----------(ne-----------t)I-----------nve-----------nto-----------ryP-----------rep-----------aid----------- ex-----------pen-----------ses-----------—-----------Lan-----------dBu-----------ild-----------ing-----------Acc-----------umu-----------lat-----------ed -----------dep-----------rec-----------iat-----------ion-----------, b-----------uil-----------din-----------gEq-----------uip-----------men-----------tAc-----------cum-----------ula-----------ted----------- de-----------pre-----------cia-----------tio-----------n, -----------equ-----------ipm-----------ent-----------Pat-----------ent-----------sTo-----------tal----------- as-----------set-----------s$9-----------58,-----------760-----------$55-----------3,3-----------60L-----------iab-----------ili-----------tie-----------s
Not Rated(0)