Question

BRECKER INC COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 $ 6,000 62.000 35,000 40.000 5000 154.000 135.000 46.000 12/31/16 S 7.000 51.000 18.000 60,000 4.000 130.000 (25.000) 50.000 $313.000 $295.000 Cash Accounts receivable Short-term debt investments (available-for-sale) Inventory Prepaid rent Equipment Accumulated depreciation-equipment Copyrights Total assets Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, 510 par Contributed capital, common stock Retained earnings Total liabilities and stockholders' equity $ 16000 $ 40,000 8000 60.000 100.000 30.000 57.000 $313.000 100 30.000 16.000 5295,000 BRECKER INC. INCOME STATEMENT FOR THE YEAR ENDING DECEMBER 31, 2017 Si 150 175.000 163150 120,000 43.190 Sales revenue Cost of goods sold Gross profit Operating expenses Operating income Interest expense Gain on sale of equipment Income before tax Income tax expense Net income $11.400 32.750 $ 27,000 Additional information: 1. Dividends in the amount of $6,000 were declared and paid during 2017 2. Depreciation expense and amortization expense are included in operating expenses 3. No unrealized gains or losses have occurred on the investments during the year. 4. Equipment that had a cost of $20,000 and was 70% depreciated was sold during 2017, Instructions Prepare a statement of cash flows using the direct method. (Do not prepare a reconciliation schedule E23-14 (L02) (SCF-Indirect Method) Data for Brecker Inc. are presented in 123:13 Instructions Prepare a statement of cash flows using the indirect method. E23-15 (L02) (SCF-Indirect Method) The following data are taken from the records of Alee Company December 31, December 31 Cash Current assets other than cash Long-term debt investments $ 15.000 85.000 60.000 235.000 $145.000 215.000 $336.000

Answer 1

	Working-Direct Cash Flow Statement
	Sales	$    3,38,150.00
	Less: Increase in Accounts receivable	$      -11,000.00
	Cash received from customers	$    3,27,150.00
	Cost of goods sold	$    1,75,000.00
	Less: Decrease in Inventory	$      -20,000.00
	Purchases	$    1,55,000.00
	Add: Decrease in Accounts Payable	$        -6,000.00
	Cash paid for inventory	$    1,49,000.00
	Other Operating Expenses	$    1,20,000.00
	Add: Increase in Prepaid Rent	$          1,000.00
	Less: Amortization of copyright	$        -4,000.00
	Increase in salaries and wages Payable	$        -4,000.00
	Depreciation	$      -24,000.00
	Cash paid for other operating expenses	$       89,000.00
	Income Tax expense	$          6,750.00
	Add: Decrease in income tax payable	$          2,000.00
	Cash paid for income taxes	$          8,750.00
	Accumulated Depreciation Account
	To Equipment Account	14000	By Balance b/d	25000
	By Balance C/d	35000	By Depreciation	24000
		49000		49000
	Equipment Account
	To Balance b/d	$    1,30,000.00	By Bank	8000
	To Profit on Sale of Equipment	$          2,000.00	By Accumulated Depreciation	14000
	To Bank(Purchase)	$       44,000.00	By Balance C/d	$        1,54,000.00
		176000		176000
	BRECKER INC.
	Statement of Cash Flow(Direct Method)
	For the year ended December 31st,2017
	Cash Flow from operating activities
	Cash Received from customer	$    3,27,150.00
	Cash paid to supplier	$ (1,49,000.00)
	Cash paid for operating expenses	$     (89,000.00)
	Cash Paid for Interest	$     (11,400.00)
	Cash paid for Income taxes	$       (8,750.00)
	Net cash provided by operating activities	$       69,000.00
	Cash Flow from investing activities
	Purchased of Equipment	$     (44,000.00)
	Sale of Equipment	$          8,000.00
	Purchase of Investment	$     (17,000.00)
	Net cash used by investing activities	$     (53,000.00)
	Cash flow from financing activities
	Payment of Short term loan	$       (2,000.00)
	Payment of long term loan	$       (9,000.00)
	Dividend Paid	$       (6,000.00)
	Net cash used by financing activities	$     (17,000.00)
	Net increase in cash	$       (1,000.00)
	Cash January 1,2017	$          7,000.00
	Cash December 31st 2017	$          6,000.00
	BRECKER INC.
	Statement of Cash Flow(Indirect Method)
	For the year ended December 31st,2017
	Net Income		$                               27,000.00
	Depreciation Expense	$       24,000.00
	Less: gain on sale of Equipment	$       (2,000.00)
	Amortization of Copyright($46000-$50000)	$          4,000.00
	Increase in Accounts Receivable($62000-$51000)	$     (11,000.00)
	Decrease in Inventory($40000-$60000)	$       20,000.00
	Increase in Prepaid Rent($5000-$4000)	$       (1,000.00)
	Increase in Accounts Payable($46000-$50000)	$          6,000.00
	Decrease in salaries and Wages Payable($8000-$4000)	$          4,000.00
	Decrease in Income Tax Payable($4000-$6000)	$       (2,000.00)	$                               42,000.00
	Net Cash provided by operating activities(A)		$                               69,000.00
	Cash Flow from investing activities
	Purchased of Equipment	$     (44,000.00)
	Sale of Equipment	$          8,000.00
	Purchase of Investment($35000-$18000)	$     (17,000.00)
	Net cash used by investing activities		$                             (53,000.00)
	Cash flow from financing activities
	Payment of Short term loan($8000-$10000)	$       (2,000.00)
	Payment of long term loan($60000-$69000)	$       (9,000.00)
	Dividend Paid(Given)	$       (6,000.00)
	Net cash used by financing activities	$     (17,000.00)	$                             (17,000.00)
	Net increase in cash		$                               (1,000.00)
	Cash January 1,2017		$                                 7,000.00
	Cash December 31st 2017		$                                 6,000.00