1. Acme Manufacturing has provided the following financial statements:
ACME MANUFACTURING
Comparative Balance Sheets
For the Years Ended December 31, 19×8 and 19×9
|
ASSETS |
19×8 |
19×9 |
|
Cash |
$ 112,500 |
$ 350,000 |
|
Accounts Receivable |
350,000 |
281,250 |
|
Inventories |
125,000 |
150,000 |
|
Plant and Equipment |
1,000,000 |
1,025,000* |
|
Accumulated Depreciation |
(500,000) |
(525,000) |
|
Land |
500,000 |
718,750 |
|
Total Assets |
$1.587.500 |
$2.000,000 |
|
LIABILITIES AND EQUITY |
||
|
Accounts Payable |
$ 300,000 |
$ 237,500 |
|
Mortgage Payable |
250,000 |
|
|
Common Stock |
75,000 |
75,000 |
|
Contributed Capital in Excess of Par |
300,000 |
300,000 |
|
Retained Earnings |
912,500 |
1,137,500 |
|
Total Liabilities and Equity |
$1,587,500 |
$2,000,000 |
|
*Beginning Equipment |
$ 1,000,000 |
|
Purchases |
250,000 |
|
Less Sales |
(225,000) |
|
Ending Equipment |
$ 1,025,000 |
ACME MANUFACTURING
Income Statement
For the Year Ended December 31, 19×9
|
Revenues |
$1,200,000 |
|
Gain on Sale of Equipment |
50,000 |
|
Less: Cost of Goods Sold |
(640,000) |
|
Less: Depreciation Expense |
(125,000) |
|
Less: Interest Expense |
(35,000) |
|
Net Income |
$ 450,000 |
Other information:
(a) Equipment with a book value of $125,000 was sold for $175,000 (original cost was
$225,000).
(b) Dividends of $225,000 were declared and paid.
Prepare a statement of cash flows.