Respuesta :
Answer:
Grandview Corporation
1. Calculation of the missing figures:
Grandview Corporation
Balance sheets
At December 31
2011 2010
_________________________________________________________
Assets:
Cash $145 $59
Accounts receivable 93 84
Investments ___ 50
Inventory 60 52
Property, plant & equipment 150 150
Less: accumulated depreciation (65) (55)
Total assets $383 $340
Liabilities and shareholders' equity:
Accounts payable to suppliers $40 $30
Payables: selling & admin. exp. 9 9
Income taxes payable 22 24
Common stock 240 230
Retained earnings 72 47
Total liabilities and shareholders'
equity $383 $340
2. Preparation of the operating activities section of
Grandview's 2011 Statement of Cash Flows using the indirect method:
Net Income $28
add non-cash flows:
Depreciation 10
Increase/Decrease in working capital:
Accounts receivable (9)
Inventory (8)
Accounts Payable to suppliers 10
Income taxes 2
Net cash flows from operating activities
Explanation:
a) Data and Calculations:
Grandview Corporation
Statement of cash flows
For the Year Ended December 31, 2011
Cash flows from operating activities:
Collections from customers $71
Payment to suppliers (30)
Payment of general & administrative expenses (18)
Payment of income taxes (9)
___
Net cash flows from operating activities 14
Cash flow
Sale of investments 65
Cash flows from financing activities
Issuance of common stock 10
Payment of dividends 3
_
Net cash flows from financing activities 7
Net increase in cash 86
Grandview Corporation
Income Statement
For the Year Ended December 31, 2011
Sales revenue $80
Cost of good sold 32
__
Gross profit 48
Operating expenses:
General and administrative $18
Depreciation 10
___
Total operating expenses 28
Operating income 20
Other income:
Gain on sale of investments 15
Income before income taxes 35
Income tax expense 7
Net income $28
Grandview Corporation
Balance sheets
At December 31
2011 2010
_________________________________________________________
Assets:
Cash $145 ?
Accounts receivable ? 84
Investments ___ 50
Inventory 60 ?
Property, plant & equipment 150 150
Less: accumulated depreciation (65) ?
Total assets ? ?
Liabilities and shareholders' equity:
Accounts payable to suppliers $40 $30
Payables: selling & admin. exp. 9 9
Income taxes payable 22 ?
Common stock 240 230
Retained earnings ? ?
Total liabilities and shareholders'
equity ? ?
Calculation of the missing figures:
Cash
Beginning balance $59
Collections from customers 71
Sale of Investment 65
Issuance of common stock 10
Payment to suppliers (30)
Payment of general & administrative expenses (18)
Payment of income taxes (9)
Dividends (3)
Ending balance $145
Accounts receivable
Beginning balance $ 84
Sales revenue 80
Collections from customers (71)
Ending balance $93
Investments
Beginning balance 50
Cash (65)
Gain from sale of investment 15
Inventory
Beginning balance 52
Purchases 40
Goods available for sale 92
less cost of goods sold 32
Ending balance 60
Property, plant & equipment 150 150
Accumulated depreciation - Property, plant & equipment
Beginning balance 55
Depreciation expenses 10
Ending balance 65
Liabilities and shareholders' equity:
Accounts payable to suppliers
Beginning balance $30
Purchases 40
Payment to suppliers 30
Ending balance $40
Payables: selling & admin. expenses
Beginning balance $9
Cash Payment 18
Ending balance 9
Expenses $18
Income taxes payable
Beginning balance 24
Income tax 7
Cash payment 9
Ending balance 22
Common stock
Beginning balance 230
Cash 10
Ending balance 240
Retained earnings
Beginning balance 47
Net income 28
Cash dividends (3)
Ending balance 72
The figures for Retained Earnings were obtained from the balance sheet.
