• FirefoxInstall the new Firefox »
  •  
    Corporations

    Question

    Prepare a statement of cash flows for the Crosby Corporation. Follow general rules.?
    Sales for the yr 2008 were $330.000, with COG sold being 60% of sales. Selling and admin expense was $33,000. Depreciation expense was 10%, while interest on bonds payable was 12%. these based on Dec 31, 2007 balances. Tax rate averaged 20%. $2,000 in preferred stock dividends were paid and $4,100 in dividens wer paid to common stockholders. There were 10,000 shares of commom stock outstanding. During 2008, cash balance and prepaid expenses balance were unchanged. Accounts receivable & inventory increased by 20%. A new machine was purchased on Dec. 31, 2008 at $60,000. Accounts payable increased by 30%. At yr end, Dec. 31, 2008, notes payable increased by $10,000 and bonds payable decreased by $15,000. Common stock & paid-in capital in excess of par accounts did not change. a. prepare income statement for yr 2008. b. prepare a statement of retained earnings for yr 2008. c. prepare a balance sheet as of Dec. 31, 2008. 27. Prepare a statement of cash flows for the Crosby Corporation and follow general procedures. Prepare a statement of cash flows for the Crosby Corporation? CROSBY CORPORATION Income Statement For the Year Ended December 31, 2008 Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $2,200,000 Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,300,000 Gross profits . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 900,000 Selling and administrative expense . . . . . . . . . . . . . . . . . . . . 420,000 Depreciation expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 150,000 Operating income . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 330,000 Interest expense . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 90,000 Earnings before taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240,000 Taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,000 Earnings after taxes . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160,000 Preferred stock dividends . . . . . . . . . . . . . . . . . . . . . . . . . . . 10,000 Earnings available to common stockholders . . . . . . . . . . . . . $ 150,000 Common shares outstanding . . . . . . . . . . . . . . . . . . . . . . . . 120,000 Earnings per share . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 1.25 Statement of Retained Earnings For the Year Ended December 31, 2008 Retained earnings, balance, January 1, 2008 . . . . . . . . . . . . . . . . . . . . $500,000 Add: Earnings available to common stockholders, 2008 . . . . . . . . . . 150,000 Deduct: Cash dividends declared and paid in 2008 . . . . . . . . . . . . . 50,000 Retained earnings, balance, December 31, 2008 . . . . . . . . . . . . . . . . . $600,000 Comparative Balance Sheets For 2007 and 2008 Year-End 2007/Year-End 2008 Assets Current assets: Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 70,000 /$ 100,000 Accounts receivable (net) . . . . . . . . . . . . . . . . . . . . . . . . . . 300,000 /350,000 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 410,000 /430,000 Prepaid expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50,000/ 30,000 Total current assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 830,000/ 910,000 Investments (long-term securities) . . . . . . . . . . . . . . . . . . . 80,000 /70,000 Plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,000,000 /2,400,000 Less: Accumulated depreciation . . . . . . . . . . . . . . . . . . . 1,000,000 /1,150,000 Net plant and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . 1,000,000 /1,250,000 Total assets . ................................................................ $1, 910,000 /$2, 230,000 Liabilities and Stockholders’ Equity Current liabilities: Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 250,000 /$ 440,000 Notes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 400,000/ 400,000 Accrued expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000 /50,000 Total current liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . 720,000 /890,000 Long-term liabilities: Bonds payable, 2012 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70,000 /120,000 Total liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 790,000 /1,010,000 Stockholders' equity: Preferred stock, $100 per value . . . . . . . . . . . . . . . . . . . . . . 90,000 90,000 Common stock, $1 par value . . . . . . . . . . . . . . . . . . . . . . . . 120,000 120,000 Capital paid in excess of par . . . . . . . . . . . . . . . . . . . . . . . . 410,000 410,000 Retained earnings . . . . . . . . . .
    a few seconds ago 1 Answer

    Best Answer

    CROSBY CORPORATION Statement of Cash Flows For the Year Ended December 31, 2008 Cash flows from operating activities: Net income (earnings after taxes) 160,000 Adjustments to determine cash flow from operating activities: Add back depreciation 150,000 Increase in accounts receivable (50,000) Increase in inventory (20,000) Decrease in prepaid expenses 20,000 Increase in accounts payable 190,000 Decrease in accrued expenses (20,000) Total adjustments 270,000 Net cash flows from operating activities 430,000 Cash flows from investing activies: Decrease in investments (long-term securities) 10,000 Increase in plant and equipment (400,000) Net cash flows from investing activities (390,000) Cash flows from financing activities: Increase in bonds payable 50,000 Preferred stock dividends paid (10,000) Common stock dividends paid (50,000) Net cash flows from financing activities (10,000) Net increase in cash flows 30,000
    a few seconds ago

    Recommended Articles

     
     
     
     
    Yahoo Small Business Services