Question

Presented below are the financial statements of Wildhorse Company.

Wildhorse Company
Comparative Balance Sheets
December 31

Assets

2017

2016

Cash
$ 41,300

$ 23,600

Accounts receivable
23,600

16,520

Inventory
33,040

23,600

Property, plant, and equipment
70,800

92,040

Accumulated depreciation
(37,760

)

(28,320

)

Total
$130,980

$127,440

Liabilities and Stockholders’ Equity

Accounts payable
$ 22,420

$ 17,700

Income taxes payable
8,260

9,440

Bonds payable
20,060

38,940

Common stock
21,240

16,520

Retained earnings
59,000

44,840

Total
$130,980

$127,440

Wildhorse Company
Income Statement
For the Year Ended December 31, 2017

Sales revenue
$285,560

Cost of goods sold
206,500

Gross profit
79,060

Selling expenses
$21,240

Administrative expenses
7,080

28,320

Income from operations
50,740

Interest expense
3,540

Income before income taxes
47,200

Income tax expense
9,440

Net income
$ 37,760


Additional data:
1. Depreciation expense was $20,650.
2. Dividends declared and paid were $23,600.
3. During the year equipment was sold for $10,030 cash. This equipment cost $21,240 originally and had accumulated depreciation of $11,210 at the time of sale.
Problem 12-7A Presented below are the financial st

Problem 12-7A Presented below are the financial st
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Answer 1

Cash flows using the indirect method $ 17,700

Step-by-step explanation:

Assets 2017 2016

Cash $41,300 $23,600

Accounts Receivable $23,600 $16,520

Inventory $33,040 $23,600

TOTAL CURRENT ASSETS $97,940 $63,720

Property and Equipment $70,800 $92,040

Depreciation Acc. -$37,760 -$28,320

TOTAL ASSETS $130,980 $127,440

Liabilities

Accounts Payable $22,420 $17,700

Bonds Payable $20,060 $38,940

Income Tax Payable $8,260 $9,440

TOTAL CURRENT LIABILITIES $50,740 $66,080

TOTAL LIABILITIES $50,740 $66,080

Common Stock $21,240 $16,520

Retained Earnings $59,000 $44,840

TOTAL EQUITY $80,240 $61,360

TOTAL EQUITY + LIABILITIES $130,980 $127,440

Income Statement 2017

Sales revenue $285,560

Cost of goods sold -$206,500

Gross Profit $79,060

Selling expenses -$21,240

Administrative expenses -$7,080

Income from Operations $50,740

Interest expenses -$3,540

Income before income taxes $47,200

Income taxe expenses -$9,440

NET INCOME $37,760

Cash Flow Ind Method $17,700

Net Income $37,760

Depreciation $20,650

Dividends -$23,600

Bonds Payables -$18,880

Income Tax Payable -$1,180

Accounts Payables $4,720

Inventory -$9,440

Accounts Receivable -$7,080

Common Stock $4,720

Equipment Sold -$0,910

Equipment $10,940

Retained Earnings Report

Opening retained earnings $44,840

Add: Net Income $37,760

Subtotal $82,600

Less: Dividens -$23,600

Ending retained earnings $ 59,000