Joyner Company’s income statement for Year 2 follows: Sales $ 705,000 Cost of goods sold 92,000 Gross margin 613,000 Selling and administrative expenses 150,900 Net operating income 462,100 Nonoperating items: Gain on sale of equipment 6,000
Joyner Company’s income statement for Year 2 follows: Sales $ 705,000 Cost of goods sold 92,000 Gross margin 613,000 Selling and administrative expenses 150,900 Net operating income 462,100 Nonoperating items: Gain on sale of equipment 6,000
Intermediate Accounting: Reporting And Analysis
3rd Edition
ISBN:9781337788281
Author:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Publisher:James M. Wahlen, Jefferson P. Jones, Donald Pagach
Chapter5: The Income Statement And The Statement Of Cash Flows
Section: Chapter Questions
Problem 1RE: Brandt Corporation had sales revenue of 500,000 for the current year. For the year, its cost of...
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Joyner Company’s income statement for Year 2 follows:
Sales | $ 705,000 |
---|---|
Cost of goods sold | 92,000 |
Gross margin | 613,000 |
Selling and administrative expenses | 150,900 |
Net operating income | 462,100 |
Nonoperating items: | |
Gain on sale of equipment | 6,000 |
Income before taxes | 468,100 |
Income taxes | 187,240 |
Net income | $ 280,860 |
Its balance sheet amounts at the end of Years 1 and 2 are as follows:
Year 2 | Year 1 | |
---|---|---|
Assets | ||
Cash | $ 263,360 | $ 89,900 |
Accounts receivable | 227,000 | 113,000 |
Inventory | 319,000 | 288,000 |
Prepaid expenses | 9,000 | 18,000 |
Total current assets | 818,360 | 508,900 |
Property, plant, and equipment | 634,000 | 514,000 |
Less |
166,100 | 130,200 |
Net property, plant, and equipment | 467,900 | 383,800 |
Loan to Hymans Company | 42,000 | 0 |
Total assets | $ 1,328,260 | $ 892,700 |
Liabilities and |
||
Accounts payable | $ 314,000 | $ 254,000 |
Accrued liabilities | 42,000 | 53,000 |
Income taxes payable | 84,400 | 81,700 |
Total current liabilities | 440,400 | 388,700 |
Bonds payable | 207,000 | 117,000 |
Total liabilities | 647,400 | 505,700 |
Common stock | 335,000 | 288,000 |
345,860 | 99,000 | |
Total stockholders' equity | 680,860 | 387,000 |
Total liabilities and stockholders' equity | $ 1,328,260 | $ 892,700 |
Equipment that had cost $31,000 and on which there was accumulated depreciation of $11,600 was sold during Year 2 for $25,400. The company declared and paid a cash dividend during Year 2. It did not retire any bonds or repurchase any of its own stock.
Required:
1. Using the indirect method, compute the net cash provided by/used in operating activities for Year 2.
2. Prepare a statement of
3. Compute the
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