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Question 5 |
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Correct. |
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Condensed financial data of Arma Inc. follow.
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ARMA INC. |
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Comparative Balance Sheets |
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December 31 |
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Assets |
2011 |
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2010 |
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Cash |
$90,800 |
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$48,400 |
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Accounts receivable |
92,800 |
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33,000 |
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Inventories |
112,500 |
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102,850 |
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Prepaid expenses |
28,400 |
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26,000 |
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Investments |
138,000 |
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114,000 |
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Plant assets |
270,000 |
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242,500 |
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Accumulated depreciation |
(50,000) |
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(52,000) |
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Total |
$682,500 |
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$514,750 |
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Liabilities and Stockholders' Equity |
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Accounts payable |
$112,000 |
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$67,300 |
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Accrued expenses payable |
16,500 |
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17,000 |
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Bonds payable |
110,000 |
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150,000 |
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Common stock |
220,000 |
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175,000 |
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Retained earnings |
224,000 |
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105,450 |
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Total |
$682,500 |
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$514,750 |
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ARMA INC. |
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Income Statement |
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For the Year Ended December 31, 2011 |
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Sales |
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$392,780 |
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Less: |
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Cost of goods sold |
$135,460 |
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Operating expenses, excluding depreciation |
12,410 |
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Depreciation expense |
46,500 |
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Income taxes |
27,280 |
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Interest expense |
4,730 |
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Loss on sale of plant assets |
7,500 |
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233,880 |
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Net income |
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$158,900 |
Additional information:
- New plant assets costing $85,000 were purchased for cash during the year.
- Old plant assets having an original cost of $57,500 were sold for $1,500 cash.
- Bonds matured and were paid off at face value for cash.
- A cash dividend of $40,350 was declared and paid during the year.
Further analysis reveals that accounts payable pertain to merchandise creditors.
Complete the statement of cash flows for Arma Inc. using the direct method. (List amounts from largest positive to smallest positive followed by most negative to least negative, e.g. 15, 14, 10, -17, -5, -1. If amount decreases cash flow for financing and investing activities, use either a negative sign preceding the number e.g. -45 or parentheses e.g. (45). List all other amounts as positive.)
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- Posted on May. 26, 2012 at 03:37:40AM
Question No.5 ch 5 HW.docx (55K)