Spreadsheet and Statement of Cash Flows The following information was taken from Lamberson Company's accounting records:   Account Balances Account Titles January 1, 2016 December 31, 2016 Debits     Cash $ 1,400 $ 2,400 Accounts Receivable (net) 2,800 2,690 Marketable Securities (at cost) 1,700 3,000 Allowance for Change in Value 500 800 Inventories 8,100 7,910 Prepaid Items 1,300 1,710 Investments (long-term) 7,000 5,400 Land 15,000 15,000 Buildings and Equipment 32,000 46,200 Discount on Bonds Payable — 290   $69,800 $85,400 Credits     Accumulated Depreciation $16,000 $16,400 Accounts Payable 3,800 4,150 Income Taxes Payable 2,400 2,504 Wages Payable 1,100 650 Interest Payable — 400 Note Payable (long-term) 3,500 — 12% Bonds Payable — 10,000 Deferred Taxes Payable 800 1,196 Convertible Preferred Stock, $100 par 9,000 — Common Stock, $10 par 14,000 21,500 Additional Paid-in Capital 8,700 13,700 Unrealized Increase in Value of Marketable Securities 500 800 Retained Earnings 10,000 14,100   $69,800 $85,400 Additional information for the year: Sales   $ 39,930 Cost of goods sold   (19,890) Depreciation expense   (2,100) Wages expense   (11,000) Other operating expenses   (1,000) Bond interest expense   (410) Dividend revenue   820 Gain on sale of investments   700 Loss on sale of equipment   (200) Income tax expense   (2,050) Net income   $ 4,800 Dividends declared and paid totaled $700. On January 1, 2016, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion. Long-term nonmarketable investments that cost $1,600 were sold for $2,300. The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year. Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets. Equipment was purchased at a cost of $16,200. The 12% bonds payable were issued on August 31, 2016, at 97. They mature on August 31, 2026. The company uses the straight-line method to amortize the discount. Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable. Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.   To do:  Prepare the statement of cash flows. Compute the cash flow from operations to sales ratio and the profit margin ratio for 2016. Round your answers to one decimal place. Cash flows from operations ratio : Profit margin:

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
icon
Related questions
Question

Spreadsheet and Statement of Cash Flows

The following information was taken from Lamberson Company's accounting records:

  Account Balances
Account Titles January 1,
2016
December 31,
2016
Debits    
Cash $ 1,400 $ 2,400
Accounts Receivable (net) 2,800 2,690
Marketable Securities (at cost) 1,700 3,000
Allowance for Change in Value 500 800
Inventories 8,100 7,910
Prepaid Items 1,300 1,710
Investments (long-term) 7,000 5,400
Land 15,000 15,000
Buildings and Equipment 32,000 46,200
Discount on Bonds Payable 290
  $69,800 $85,400
Credits    
Accumulated Depreciation $16,000 $16,400
Accounts Payable 3,800 4,150
Income Taxes Payable 2,400 2,504
Wages Payable 1,100 650
Interest Payable 400
Note Payable (long-term) 3,500
12% Bonds Payable 10,000
Deferred Taxes Payable 800 1,196
Convertible Preferred Stock, $100 par 9,000
Common Stock, $10 par 14,000 21,500
Additional Paid-in Capital 8,700 13,700
Unrealized Increase in Value of Marketable Securities 500 800
Retained Earnings 10,000 14,100
  $69,800 $85,400

Additional information for the year:


  1. Sales   $ 39,930
    Cost of goods sold   (19,890)
    Depreciation expense   (2,100)
    Wages expense   (11,000)
    Other operating expenses   (1,000)
    Bond interest expense   (410)
    Dividend revenue   820
    Gain on sale of investments   700
    Loss on sale of equipment   (200)
    Income tax expense   (2,050)
    Net income   $ 4,800
  2. Dividends declared and paid totaled $700.
  3. On January 1, 2016, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion.
  4. Long-term nonmarketable investments that cost $1,600 were sold for $2,300.
  5. The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year.
  6. Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets.
  7. Equipment was purchased at a cost of $16,200.
  8. The 12% bonds payable were issued on August 31, 2016, at 97. They mature on August 31, 2026. The company uses the straight-line method to amortize the discount.
  9. Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable.
  10. Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.

 

To do: 

Prepare the statement of cash flows.

Compute the cash flow from operations to sales ratio and the profit margin ratio for 2016. Round your answers to one decimal place.

  1. Cash flows from operations ratio :
  2. Profit margin:
Expert Solution
trending now

Trending now

This is a popular solution!

steps

Step by step

Solved in 4 steps with 1 images

Blurred answer
Similar questions
  • SEE MORE QUESTIONS
Recommended textbooks for you
FINANCIAL ACCOUNTING
FINANCIAL ACCOUNTING
Accounting
ISBN:
9781259964947
Author:
Libby
Publisher:
MCG
Accounting
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
Accounting Information Systems
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis…
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
Intermediate Accounting
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
Financial and Managerial Accounting
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education