Declan's Designs Balance Sheet Declan's Designs Income Statement ASSETS 12/31/2021 12/31/2022 For the Year Ending 12/31/2022 Current Assets Cash and Cash Equivalents Accounts Receivable, Net Merchandise Inventory $90,000 97,000 400.000 587,000 $294,000 101,000 475,000 870,000 $225,000 (16,000) 209,000 (22,000) 187,000 (12,000) (5,000) 170,000 (7,000) $163,000 Sales Revenue CGS Total Current Assets Gross Margin SG&A Operating Income Interest Expense PPE, Net Goodwill, Net Total Assets 62,000 600,000 $1,249,000 70,000 600,000 $1,540,000 Loss on Sale of PPE Pre-Tax Income LIABILITIES & SHAREHOLDERS' EQUITY Income Tax Expense Current Liabilities Net Income Accounts Payable Interest Payable Dividends Payable Total Current Liabilities 26,000 3,000 20,000 49,000 17,000 5,000 10,000 32,000 Additional Information regarding Declan's Designs' 12/31/22 financials: Mortgage Payable Long-Term Bank Loan Total Liabilities PROPERTY, PLANT & EQUIPMENT PPE is shown net accumulated depreciation. Accumulated depreciation was $18,000 at the beginning of the year and $20,000 at the end of the year. Depreciation expense for the year was $3,000, which is included in SG&A. New PPE was bought during the year for $22,000 (in cash). 500,000 500,000 200,000 732,000 549.000 Note: You may use the worksheet provided on the last page to help you prepare the Cash Flow Statement. Shareholder's Equity Preferred Stock Hint #1: The most recent year is not always in the left column. 8,000 54,000 638,000 700,000 Common Stock Additional Paid in Capital Retained Earnings Total Shareholder's Equity 10,000 60,000 738,000 808,000 Hint #2: Evaluate changes in gross PPE separate from changes in accumulated depreciation. Recall gross PPE less accumulated depreciation equals net PPE. Hint #3: Never "plug" the annual change in gross PPE. Separately evaluate the increase in gross PPE (capital expenditures) from the annual decrease in gross PPE (sale of PPE). Total Liabilities &Shareholders' Equity $1,249,000 $1,540,000 Hint #4: The total change in cash due to stock issuances/repurchases is the sum of the change in common
Declan's Designs Balance Sheet Declan's Designs Income Statement ASSETS 12/31/2021 12/31/2022 For the Year Ending 12/31/2022 Current Assets Cash and Cash Equivalents Accounts Receivable, Net Merchandise Inventory $90,000 97,000 400.000 587,000 $294,000 101,000 475,000 870,000 $225,000 (16,000) 209,000 (22,000) 187,000 (12,000) (5,000) 170,000 (7,000) $163,000 Sales Revenue CGS Total Current Assets Gross Margin SG&A Operating Income Interest Expense PPE, Net Goodwill, Net Total Assets 62,000 600,000 $1,249,000 70,000 600,000 $1,540,000 Loss on Sale of PPE Pre-Tax Income LIABILITIES & SHAREHOLDERS' EQUITY Income Tax Expense Current Liabilities Net Income Accounts Payable Interest Payable Dividends Payable Total Current Liabilities 26,000 3,000 20,000 49,000 17,000 5,000 10,000 32,000 Additional Information regarding Declan's Designs' 12/31/22 financials: Mortgage Payable Long-Term Bank Loan Total Liabilities PROPERTY, PLANT & EQUIPMENT PPE is shown net accumulated depreciation. Accumulated depreciation was $18,000 at the beginning of the year and $20,000 at the end of the year. Depreciation expense for the year was $3,000, which is included in SG&A. New PPE was bought during the year for $22,000 (in cash). 500,000 500,000 200,000 732,000 549.000 Note: You may use the worksheet provided on the last page to help you prepare the Cash Flow Statement. Shareholder's Equity Preferred Stock Hint #1: The most recent year is not always in the left column. 8,000 54,000 638,000 700,000 Common Stock Additional Paid in Capital Retained Earnings Total Shareholder's Equity 10,000 60,000 738,000 808,000 Hint #2: Evaluate changes in gross PPE separate from changes in accumulated depreciation. Recall gross PPE less accumulated depreciation equals net PPE. Hint #3: Never "plug" the annual change in gross PPE. Separately evaluate the increase in gross PPE (capital expenditures) from the annual decrease in gross PPE (sale of PPE). Total Liabilities &Shareholders' Equity $1,249,000 $1,540,000 Hint #4: The total change in cash due to stock issuances/repurchases is the sum of the change in common
Survey of Accounting (Accounting I)
8th Edition
ISBN:9781305961883
Author:Carl Warren
Publisher:Carl Warren
Chapter4: Accounting For Retail Operations
Section: Chapter Questions
Problem 4.2MBA: Sales transactions Using transactions listed in P4-2, indicate the effects of each transaction on...
Related questions
Question
100%
How does Interest Payable impact Declan's Designs' 2022 Statement of Cash Flows?
Expert Solution
Concept
Interest payable is a current liability. Increase or decrease in current liabilities affect the "Cash Flow from Operating Activities" section of the Statement of Cash Flows.
- Any decrease in Interest payable implies that there is a cash outflows. Accordingly, cash flows from operations is decreased by the amount of decrease in interest payable.
However, any increase in interest payable, implies that the amount of interest debited in income statement is not actually completely paid. Therefore, cash outflow is lower by the increase in Interest payable.
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning
Survey of Accounting (Accounting I)
Accounting
ISBN:
9781305961883
Author:
Carl Warren
Publisher:
Cengage Learning