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Home / Questions / The following information relates to Aires Corporation for 20x8 and 20x7

The following information relates to Aires Corporation for 20x8 and 20x7

The following information relates to Aires Corporation for 20x8 and 20x7:

 

Aires Corporation

Comparative Balance Sheets

December 31, 20x8 and 20x7

Assets

       20x8

       20x7

      Change

Cash

$    21,000

$    54,000

($ 33,000)

Accounts receivable (net)

421,000

480,000

(59,000)

Inventory

310,000

340,000

(30,000)

Prepaid expenses

17,000

15,000

2,000

Investments

80,000

80,000

0

Land

350,000

300,000

50,000

Building (net)

680,000

700,000

(20,000)

Equipment (net)

    520,000

    340,000

180,000

Total assets

$2,399,000

$2,309,000

$ 90,000

Liabilities

 

 

 

Accounts payable

$   328,000

$   335,000

($   7,000)

Accrued liabilities

171,000

170,000

1,000

Income taxes payable

22,000

34,000

(12,000)

Bonds payable

410,000

700,000

(290,000)

Long-term note payable

    130,000

              0

   130,000

Total liabilities

$1,061,000

$1,239,000

($178,000)

 

 

 

 

Stockholders' Equity

 

 

 

Common stock

$  800,000

$  600,000

$200,000

Additional paid-in capital

152,000

152,000

0

Retained earnings

    386,000

    318,000

   68,000

Total stockholders' equity

$1,338,000

$1,070,000

$268,000

Total liabilities and stockholders' equity

$2,399,000

$2,309,000

$  90,000

       

 

Additional information:

Net income for 20x8 was $143,000.

Issued a long-term note payable in exchange for computer equipment for $130,000.

Purchased computer terminals for $90,000.

Depreciation on equipment for 20x8 was $40,000.

Depreciation on building for 20x8 was $20,000.

Reacquired bonds payable at par for $290,000.

Declared and paid dividends of $75,000.

Issued 20,000 shares of common stock at par value of $10 per share.

Paid $50,000 for land intended for a new plant site.

 

Prepare a statement of cash flows using the indirect method. Include a schedule of noncash investing and financing transactions, if applicable.

 

Aires Corporation

Statement of Cash Flows

For the Year Ended December 31, 20x8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

163.Use the following data for Tatum Music Company to prepare a statement of cash flows using the indirect method for the year ended June 30, 20x8.

 

Tatum Music Company

Income Statement

For the Year Ended June 30, 20x8

Sales

$350,000

Less expenses

 

Cost of goods sold

$200,000

 

 

Depreciation expense

20,000

 

 

Administrative expenses

52,000

 

 

Selling expenses

35,000

 

 

Loss on sale of investment

          500

   307,500

Income before income taxes

$  42,500

Income taxes expense

    10,000

Net income

 

$  32,500

           

 

Tatum Music Company

Comparative Balance Sheets

June 30, 20x8 and 20x7

Assets

       20x8

       20x7

Cash

$   4,500

$  15,000

Accounts receivable (net)

35,000

27,500

Inventory

40,000

50,000

Prepaid expenses

3,000

2,500

Long-term investments

20,000

25,000

Plant and equipment

80,000

40,000

Accumulated depreciation

  (20,000)

  (12,000)

Total assets

$162,500

$148,000

Liabilities

 

 

Accounts payable

$   2,000

$    6,000

Wages payable

220

260

Income taxes payable

780

740

Notes payable

    20,000

    12,000

Total liabilities

$ 23,000

$  19,000

 

 

 

Stockholders' Equity

 

 

Common stock

$  58,000

$  65,000

Retained earnings

   81,500

   64,000

Total stockholders' equity

$139,500

$129,000

Total liabilities and stockholders' equity

$162,500

$148,000

     

 

Additional information:

A plant asset costing $20,000 was sold for its book value of $8,000.

A long-term investment was sold for $4,500.

The outstanding notes are long-term. An $8,000 note was issued during 20x8.

 

 

 

 

 

 

Tatum Music Company

Statement of Cash Flows

For the Year Ended June 30, 20x8

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Dec 11 2019 View more View Less

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