Question

65 Module 5 Homework Problem 1 From the following information for Brayden's Bobbles, prepare a Statement of Cash Flows for the year ended December 31, 2018 using the indirect method Balance 12/31/18 Balance 12/31/17 Cash Accounts Receivable Inventory Prepaid Insurance Equipment Accumulated Depreciation Land Security Deposits Accounts Payable Wages Payable Rent Payable Interest Payable Taxes Payable Note Payable Common Stock ($1 each) Retained Earnings Sales Cost of Goods Sold Wage Expense Rent Expense Office Expenses Depreciation Expense Utilities Expense Insurance Expense Interest Expense Income Tax Expense 71,900 78,000 70,000 3,600 340,000 80,000 120,000 12,000 35,000 6,000 8,000 6,500 10,000 130,000 300,000 120,000 1,200,000 700,000 220,000 48,000 46,000 60,000 15,000 6,000 15,000 27,000 18,900 45,000 90,000 2,600 290,000 20,000 10,000 30,000 10,000 4,000 7,500 5,000 150,000 160,000 70,000 The land was acquired on March 31, 2018 for cash. The additional common stock was sold on September 30, 2018 for $1 per share. The company did not sell any equipment during the year. All equipment purchased during the year was purchased for cash. The Note Payable requires payments of $20,000 principal plus interest at 10% on June 30th of each year

Answer 1

Brayden's Bobbles,Balance sheet , Income statement and cash flow statement for the year ended 31 december, 2018 using indirect method -

Balance Sheet December 31, 2018 Assets Liabilities Current Assets Current Liabilities Cash Accounts Receivable Inventory Prepaid Insurance $71,900 78,000 70,000 3,600 2,23,500 Accounts Payable Wages Payable Taxes Pavable Rent Payable nterest Favable Current Maturities of $ 35,000 6,000 10,000 8,000 6,500 Total Current Assets 20,000 85,500 Fixed Assets Long-Term Debt 3,40,000 Total Current Liabilities Equipment Less: Accumulated 80,000 2,60,000 1,20,000 Depreciation Long-Term Debt Subtotal Land 1,10,000 1,95,500 Note Pavable Total Liabilities Net Fixed Assets 3,80,000 Owners' Equity $ 3,00,000 1,20,000 Other Assets Common Stock Security Deposit 12.000 Retained Earnings Total Owners' Equity 4,20,000 Total Assets $6,15,500 Total Liabilities and Owners' Equity $6,15,500

Income statement for december 31, 2018 --

Operating Expenses Wage Expense Depreciation Expense Rent Expense Office Expense Utilities Expense Insurance Expense $ 2,20,000 60,000 48,000 46,000 15,000 6,000 Total Operating Expenses Operating Income Other Revenues & <Expenses> 3,95,000 1,05,000 Interest Expense 15,000 Net Other Revenues & <Expenses> Income Before Taxes Tax Expense Net Income 15,000 90,000 27,000 $63,000 Earnings Per Share 0.32 ($63,000/((160,000*9/12)+(300,000*3/12))

Brayden's Bobbles Statement of Cash Flows For the Year Ended December 31, 2018 Operating Activities Net Income S 63,000 Adjustments to Net Income: Add: Depreciation Expense 60,000 Changes in Increase in Net Accounts Receivable Decrease in Inventory Increase in Prepaid Insurance Increase in Accounts Payable Decrease in Wages Payable Increase in Rent Payable Increase in Taxes Payable Decrease in Interest Pavable -33,000 20,000 -1,000 5,000 -4,000 4,000 5,000 1,000 1,18,000 Cash Provided by Operating Activities Investing Activities Purchases of Equipment Purchase of Land Purchase of Security Deposit 50,000 -1,20,000 2,000 Cash Used for Investing Activities Financing Activities 1,72,000 Payments on Note Payable Issuances of Common Stock Payment of Dividends -20,000 1,40,000 -13,000 Cash Used for Financing Activities 1,07,000 53,000 18,900 Increase in Cash Beginning Cash, December 31, 2017 Ending Cash, December 31, 2018 $ 71,900 Supplemental Cash Flow Information Cash payments for interest Cash payments for income taxes $ 16,000 22,000