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MCS,PHD
Argosy University/ Phoniex University/
Nov-2005 - Oct-2011
Professor
Phoniex University
Oct-2001 - Nov-2016
P12-74B (Learning Objectives 2, 3, 4: Prepare the statement of cash flows—direct and indirect methods) To prepare the statement of cash flows, accountants for Rosie Electric Company have summarized 2012 activity in two accounts as follows:
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Beginning bal 44,300 Sale of long-term investment 32,400 Collections from customers 661,500 Issuance of common stock 47,300 Receipts of dividends 16,900 |
Payments on accounts payable 399,000 Payments of dividends 27,800 Payments of salaries and wages 143,900 Payments of interest 27,000 Purchase of equipment 31,100 Payments of operating expenses 34,300 Payment of long-term note payable 41,000 Purchase of treasury stock 26,300 Payment of income tax 18,600 |
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Ending Bal 53,400 |
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Beginning bal 56,600 Issuance for cash 47,300 Issuance to acquire land 52,000 Issuance to retire note payable 24,000 |
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Ending bal 179,900 |
Rosie’s 2012 income statement and balance sheet data follow:
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Revenues: |
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Sales revenue |
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$634,000 |
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Dividend revenue |
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16,900 |
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Total revenue |
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650,900 |
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Expenses and losses: |
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Cost of goods sold |
$347,500 |
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Salary and wage expense |
151,500 |
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Depreciation expense |
18,600 |
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Other operating expense |
23,500 |
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Interest expense |
28,700 |
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Income tax expense |
15,200 |
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Loss on sale of investments |
16,500 |
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Total expenses and losses |
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601,500 |
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Net income |
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$ 49,400 |
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Increase (Decrease) |
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Current assets: |
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Cash and cash equivalents |
$ 9,100 |
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Accounts receivable |
(27,500) |
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Inventories |
59,700 |
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Prepaid expenses |
400 |
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Long-term investments |
(48,900) |
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Equipment, net |
12,500 |
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Land |
52,000 |
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Current liabilities: |
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Accounts payable |
8,200 |
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Interest payable |
1,700 |
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Salary payable |
7,600 |
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Other accrued liabilities |
(10,400) |
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Income tax payable |
(3,400) |
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Long-term note payable |
(65,000) |
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Common stock |
123,300 |
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Retained earnings |
21,600 |
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Treasury stock |
(26,300) |
▶ Requirements1. Prepare the statement of cash flows of Rosie Electric Company for the year ended December 31, 2012, using the direct method to report operating activities. Also prepare the accompanying sched- ule of non-cash investing and financing activities.
2. Use Rosie’s 2012 income statement and balance sheet to prepare a supplementary schedule of cash flows from operating activities by using the indirect method.
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