Excel Applications for Accounting Principles
4th Edition
ISBN: 9781111581565
Author: Gaylord N. Smith
Publisher: Cengage Learning
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Textbook Question
Chapter 14, Problem 1R
The comparative balance sheet of Prime Sports Gear, Inc., at December 31, the end of the fiscal year, is as follows:
Additional data obtained from the records of Prime Sports Gear are as follows:
- a. Net income for 2013 was $121,610.
- b.
Depreciation reported on income statement for 2013 was $46,500. - c. Purchased $165,000 of new equipment, putting $90,000 cash down and issuing $75,000 of bonds for the balance.
- d. Old equipment originally costing $19,500, with
accumulated depreciation of $7,950, was sold for $8,000. - e. Retired $60,000 of bonds.
- f. Declared cash dividends of $64,000.
- g. Issued 1,500 shares of common stock at $27 cash per share.
You have been asked to prepare a statement of cash flows for Prime Sports Gear for 2013. Review the worksheet called CASHFLOW that has been provided to assist you in preparing the statement. The worksheet has been designed so that as you make entries in columns D and F, column G will be automatically updated. For example, FORMULA1 should be entered as =B17+D17–F17. Columns C and E are to be used to enter letter references for each of the debit and credit entries on the worksheet.
Expert Solution & Answer
To determine
Prepare the statement of cash flow for Incorporation PSG and review the worksheet.
Explanation of Solution
Prepare the statement of cash flow for Incorporation PSG and review the worksheet.
Table (1)
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Financial information for Powell Panther Corporation is shown below:
Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2018
2017
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$
1,800.0
$
1,500.0
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1,395.0
1,275.0
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$
405.0
$
225.0
Depreciation and amortization
43.0
39.0
Earnings before interest and taxes (EBIT)
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$
186.0
Interest
40.0
33.0
Earnings before taxes (EBT)
$
322.0
$
153.0
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61.2
Net income
$
193.2
$
91.8
Common dividends
$
174.0
$
73.0
Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2018
2017
Assets
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$
23.0
$
18.0
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248.0
225.0
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396.0
360.0
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$
603.0
Net plant and equipment
429.0
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Financial information for Powell Panther Corporation is shown below:
Powell Panther Corporation: Income Statements for Year Ending December 31 (Millions of Dollars)
2018
Sales
$
1,625.0
$
2017
1,300.0
Operating costs excluding depreciation and amortization
1,300.0
1,105.0
EBITDA
$
325.0
$
195.0
Depreciation and amortization
39.0
31.0
Earnings before interest and taxes (EBIT)
$
286.0
$
164.0
Interest
36.0
29.0
Earnings before taxes (EBT)
$
250.0
$
135.0
Taxes (40%)
100.0
54.0
Net income
$
150.0
$
81.0
Common dividends
$
135.0
$
65.0
Powell Panther Corporation: Balance Sheets as of December 31 (Millions of Dollars)
2018
Assets
Cash and equivalents
$
23.0
$
2017
18.0
Accounts receivable
164.0
143.0
Inventories
343.0
312.0
Total current assets
$
530.0
$
473.0
Net plant and equipment
390.0
312.0
Total assets
$
920.0
$
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Minton Corp.'s income statement for the year
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: (300)
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averages, what rating will you assign for
Minton Corp.?
A) BBB to A
В) ВВ
C)B
D)CCC
Chapter 14 Solutions
Excel Applications for Accounting Principles
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