1. Maytag Corporation’s balance sheets for the last 2 years are provided below:
Balance Sheets
2013
2012
Cash
$ 82
$ 40
Accounts Receivable
180
150
Inventory
170
200
Equipment
200
140
Accum. Depreciation
(72)
(60)
Total Assets
$560
$470
Accounts Payable
$100
$ 80
L/T Notes Payable
100
50
Common Stock
250
250
Retained Earnings
110
90
Total Liabilities &
Stockholder Equity
$560
$470
The companys income statement for 2013 is provided below:
Income Statement
2013
Sales
$345
Expenses:
Cost of Goods Sold
$120
Operating Expenses
58
Depreciation Expense
20
Interest Expense
2
200
Operating Income
145
Gain on Sale–Equipment*
5
Income before Taxes
150
Tax Expense
30
Net Income
$120
*The company sold equipment for $57 which had a cost of $60.
A) Prepare the companys Statement of Cash flows for 2013. Use the direct method of computing cash flows from operating activities.
B) Prepare the Cash Flows from Operating Activities section of the cash flow statement using the indirect method.
Mary Kay Cosmetics
Selected data and additional information from the companys records are presented below:
Balance Sheet Data
2014
2013
Cash
$235,000
246,000
Accounts receivable
$120,000
$150,000
Inventories
56,000
50,000
Accounts payable
38,000
70,000
Salaries payable
10,000
5,000
Equipment
110,000
70,000
Accumulated depreciation
28,000
32,000
Bonds payable
100,000
200,000
Common stock
300,000
200,000
Retained earnings
76,000
40,000
Income Statement Data
2014
Net sales
$920,000
Cost of goods sold
700,000
Operating expenses (excluding depreciation expense)
160,000
Net income (Includes depreciation expense and gain)
56,000
Gain on sale of equipment
4,000
Additional information:
1.
Equipment with a cost of $30,000 and a book value of $18,000 was sold for $22,000 during 2014.
2.
Common stock was issued to retire bonds payable during 2014.
3.
The only items affecting retained earnings in 2014 were net income and dividends declared and paid.
2. Refer to Mary Kay Cosmetics. What amount of cash was collected from customers during 2014?
3. Refer to Mary Kay Cosmetics. What is the amount paid to suppliers for purchases of merchandise during 2014?
4. Refer to Mary Kay Cosmetics. What is the amount paid for operating expenses during 2014?
5. Refer to Mary Kay Cosmetics. What amount was paid to acquire equipment during 2014?
6. Refer to Mary Kay Cosmetics. What amount was recorded as depreciation expense during 2014?
7. Refer to Mary Kay Cosmetics. What amount was declared and paid for dividends during 2014?
