Group Assignment Preparing a statement of cash flows
The following financial statements and information are available for Blythe Industries Inc.
Balance Sheets As of December 31
| ||
| 2011 | 2012 |
Assets |
|
|
Cash | $120,600 | $ 160,200 |
Accounts receivable | 85,000 | 103,200 |
Inventory | 171,800 | 186,400 |
Marketable securities (available for sale) | 220,000 | 284,000 |
Equipment | 490,000 | 650,000 |
Accumulated depreciation | (240,000) | (310,000) |
Land | 120,000 | 80,000 |
Total assets | $967,400 | $1,153,800 |
Liabilities and equity |
|
|
Liabilities |
|
|
Accounts payable (inventory) | $66,200 | $ 36,400 |
Notes payable—Long-term | 250,000 | 230,000 |
Bonds payable | 100,000 | 200,000 |
Total liabilities | 416,200 | 466,400 |
Stockholders’ equity |
|
|
Common stock, no par | 200,000 | 240,000 |
Preferred stock, $50 par | 100,000 | 110,000 |
Paid-in capital in excess of par—Preferred stock | 26,800 | 34,400 |
Total paid-in capital | ,326,800 | 384,400 |
Retained earnings | 264,400 | 333,000 |
Less: Treasury stock | (40,000) | (30,000) |
Total stockholders’ equity | 551,200 | 687,400 |
Total liabilities and stockholders’ equity | $967,400 | $1,153,800 |
Income Statement For the year Ended December 31,2012 | ||
Sales revenue |
| $1,050,000 |
Cost of goods sold |
| (766,500) |
Gross profit |
| 283,500 |
Operating expenses |
|
|
Supplies expense | $20,400 |
|
Salaries expense | 92,000 |
|
Depreciation expense | 90,000 |
|
Total operating expenses |
| (202,400) |
Operating income |
| 81,100 |
Nonoperating items |
| - |
Interest expense |
| (16,000) |
Gain from the sale of marketable securities |
| 30,000 |
Gain from the sale of land and equipment |
| 12,000 |
Net income |
| $ 107,100 |
Additional Information
1. Sold land that cost $4(1000 for $44,000.
2. Sold equipment that cost $30,000 and had accumulated depreciation of $20,000 for $18,000.
3. Purchased new equipment for $190,000.
4. Sold marketable securities, classified as available-for-sale, that cost $40,000 for $70,000.
5. Purchased new marketable securities, classified as available-for-sale, for $104,000.
6. Paid $20,000 on the principal of the long-term note.
7. Paid off a $100,000 bond issue and issued new bonds for $200,000.
8. Sold 100 shares of treasury stock at its cost.
9. Issued some new common stock.
10. Issued some new $50 par preferred stock.
11. Paid dividends. (Note: The only transactions to affect retained earnings were net income and dividends.)
Required
Organize the class into three sections, and divide each section into groups of three to five students. Assign each section of groups an activity section of the statement of cash flows (operating activities, investing activities, or financing activities).
Group Task
Prepare your assigned portion of the statement of cash flows. Have a representative of your section put your activity section of the statement of cash flows on the board. As each section adds its information on the board, the full statement of cash flows will be presented.
Class Discussion
Have the class finish the statement of cash flows by computing the net change in cash. Also have the class answer the following questions:
a. What is the cost per share of the treasury stock?
b. What was the issue price per share of the preferred stock?
c. What was the book value of the equipment sold?
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