Can anyone help me form a statement of cash flows using the indirect method? thanks!
Kazaam Company, a merchandiser, recently completed its calendar-year 2011 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially debited to Prepaid Expenses. The company’s balance sheets and income statement follow.
KAZAAM COMPANY
Comparative Balance Sheets
December 31, 2011 and 2010
2011 2010
Assets
Cash $107,750 $153,250
Accounts receivable 130,000 99,250
Merchandise inventory 547,500 505,000
Prepaid expenses 18,750 27,500
Equipment 319,000 220,000
Accum. depreciation—Equipment (69,250) (88,000)?
Liabilities and Equity
Accounts payable $176,250 233,250
Short-term notes payable 20,000 12,500
Long-term notes payable 187,500 107,500
Income taxes payable 8,000 15,000
Common stock, $5 par value 337, 500 312,500
Paid-in capital in excess of par, common stock 65,000 0
Retained earnings 259,500 236,250
Operating expenses
Depreciation expense 37,500
Other expenses 273,000 (310,500)
Other gains (losses)
Loss on sale of equipment (10,250)
Gain on sale of equipment 7,000 (3,250)
a. The company sold two equipment during the period. The first equipment had a cost of $93,750, with accumulated depreciation of $56,250 and was sold for a loss. The second equipment was sold for a gain. The amount of loss and gain is shown on the income statement.
b. The company purchased equipment costing $242,750 by paying $50,000 cash and signing a long-term note payable for the balance.
c. The company borrowed $30,000 cash by signing a new short-term note payable.
Required:
1 Prepare a complete statement of cash flows; report its operating activities using the indirect method. (Amounts to be deducted should be indicated with a minus sign.)
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Open Question: Statement of Accounting – Indirect Method?… December 2, 2013 Can anyone help me form a statement of cash flows using the indirect method? thanks! Kazaam Company, a merchandiser, recently completed its calendar-year 2011 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially…
Open Question: statement of cash flows using the direct… December 2, 2013 Can anyone help me form a statement of cash flows using the direct method? thanks! Kazaam Company, a merchandiser, recently completed its calendar-year 2011 operations. For the year, (1) all sales are credit sales, (2) all credits to Accounts Receivable reflect cash receipts from customers, (3) all purchases of inventory are on credit, (4) all debits to Accounts Payable reflect cash payments for inventory, and (5) Other Expenses are paid in advance and are initially…
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