Concept explainers
Statement of
Norwich Manufacturing, Inc. Balance Sheets At December 31 |
||
Assets | Current Year | Prior Year |
Current Assets | ||
Cash | $ 45,000 | $ 22,000 |
Available-for-Sale Debt Investments | 58,000 | 82,000 |
95,000 | 55,000 | |
Merchandise Inventory | 135,000 | 95,000 |
Total Current Assets | $ 333,000 | $254,000 |
Norwich Manufacturing, Inc. Balance Sheets At December 31 |
||
Current Year | Prior Year | |
Noncurrent Assets | ||
Investments in Affiliate Companies | $ 265,000 | $ 100,500 |
Property. Plant, and Equipment - net | 1,364,500 | 1,530,500 |
Intangible Assets - net | 87,500 | 125,000 |
Total Noncurrent Assets | $ 1,717,000 | $1,756,000 |
Total Assets | $2,050,000 | $2,010,000 |
Liabilities | ||
Current Liabilities |
Current Portion of Long-Term Debt | $ 25,000 | $ 65,800 |
Accounts Payable | 187,000 | 128,500 |
Dividends Payable | 75,000 | 55,000 |
Income Taxes Payable | 65,800 | 58,500 |
Total Current Liabilities | $ 352,800 | $ 307,800 |
Noncurrent Liabilities | ||
Bonds Payable | $ 400,000 | $ 400,000 |
Less: Discount on Bonds | (128,500) | (145,000) |
Notes Payable | 225,500 | 225,000 |
62,500 | 72,500 | |
Net Obligations under Pension Plans | 80,000 | 60,000 |
Total Noncurrent Liabilities | $ 639,500 | $ 612,500 |
Total Liabilities | $ 992,300 | $ 920,300 |
Shareholders' Equity | ||
Common Stock. $1 par value | $ 135,000 | $ 135,000 |
Additional Paid-in Capital in Excess of Par - Common | 351,500 | 351,500 |
Additional Paid-in Capital - Stock Options | 16,500 | 0 |
685,000 | 523,700 | |
Accumulated Other Comprehensive Income | (130,300) | 79,500 |
Total Shareholders' Equity | $ 1,057,700 | $1,089,700 |
Total Liabilities and Shareholders' Equity | $2,050,000 | $2,010,000 |
Norwich Manufacturing, Inc. Income Statement For the Current Year Ended December 31 |
|
Sales | $2,433,244 |
Cost of Goods Sold | 1,459,946 |
Gross Profit | $ 973,298 |
Selling, General, and Administrative Expenses | $ 59,800 |
Pension Expense | 260,510 |
Bad Debt Expense | 1,650 |
Depreciation Expense | 19,470 |
Amortization Expense | 7,425 |
Total Operating Expenses | $ 348,855 |
Operating Income | $ 624,443 |
Interest Expense | $ (55,110) |
Investment Income (includes gain on sale) | 55,000 |
Equity Earnings from Affiliate Companies | 164,500 |
Income before Tax | $ 788,833 |
Income Tax Expense | (301,873) |
Net Income | $ 486,960 |
Additional information
- Norwich sold available-for-sale investments that had been acquired for $55,000 at a gain of $40, 500 It included this gain in investment income on the income statement.
- The company acquired additional shares as investments to be earned at fair value It accounted for all investments except for investments carried under the equity method as available-for-sale securities It recorded a $9, 000 unrealized loss for the current year.
- It reported accounts receivable net of the allowance for
bad debts - It sold equipment at book value.
- It did not increase its percentage ownership of its equity investee (affiliate company)
- It sold one of its franchises at book value
- It signed a $100,000 promissory note issued by an equipment dealer in the acquisition of a plant asset
- It did not borrow additional cash funds during the year
Required
Prepare Norwich Manufacturing s cash flow statement for the current year using the indirect method Present required disclosures.
Want to see the full answer?
Check out a sample textbook solutionChapter 22 Solutions
Intermediate Accounting
Additional Business Textbook Solutions
Horngren's Financial & Managerial Accounting, The Financial Chapters (Book & Access Card)
Managerial Accounting (4th Edition)
Managerial Accounting
Financial Accounting, Student Value Edition (4th Edition)
Accounting For Governmental & Nonprofit Entities
- Use the following excerpts from Indigo Companys balance sheets to determine net cash flows from operating activities (indirect method), assuming net income for 2018 of $225,000.arrow_forwardUse the following information from Birch Companys balance sheets to determine net cash flows from operating activities (indirect method), assuming net income for 2018 of $122,000.arrow_forwardWe are given the following information for Pettit Corporation. Sales (credit) Cash Inventory Current liabilities Asset turnover Current ratio Debt-to-assets ratio Receivables turnover $2,068,000 150,000 923,000 763,000 a. Accounts receivable b. Marketable securities c. Capital assets. d. Long-term debt $ Current assets are composed of cash, marketable securities, accounts receivable, and inventory. Calculate the following balance sheet items: LA LA LA $ $ 1.00 times 2.60 times $ 40 % 4 times 517000arrow_forward
- Use the comparative balance sheet and the additional information provided to prepare a cash flow statement for Yannik Inc for the year ended 12/31/2021. Cash Accounts receivable (net) Inventory Equipment Accumulated depreciation TOTAL Accounts payable Notes payable - Long-term Common stock Retained earnings TOTAL Notes 2021 900,000 600,000 900,000 1,500,000 (600,000) 3,200,000 650,000 700,000 1,200,000 750,000 3,200,000 2020 700,000 500,000 750,000 1,200,000 (500,000) 2,650,000 400,000 800,000 1,000,000 450,000 2,650,000 1. Net income was $400,000. 2. Net income include a loss on sale of equipment equal to $20,000. The equipment had a book value of $80,000 at the time of sale. 3. Depreciation for the year was $100,000 4. Dividends of 100,000 have been declared and paid. 5. Increases or decreases in Equipment, Common Stock or Notes Payable refers to relevant purchases, issuances sales or retirements.arrow_forwardStatement of Cash Flows for the following: The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: 1 Dec. 31, 20Y8 Dec. 31, 20Y7 2 Assets 3 Cash $95,000.00 $110,000.00 4 Accounts receivable (net) 260,000.00 280,000.00 5 Inventories 520,000.00 450,000.00 6 Prepaid expenses 15,000.00 5,000.00 7 Equipment 1,130,000.00 800,000.00 8 Accumulated depreciation-equipment (235,000.00) (190,000.00) 9 Total assets $1,785,000.00 $1,455,000.00 10 Liabilities and Stockholders’ Equity 11 Accounts payable (merchandise creditors) $100,000.00 $75,000.00 12 Mortgage note payable 0.00 500,000.00 13 Common stock, $10 par 500,000.00 200,000.00 14 Paid-in capital in excess of par—common stock 400,000.00 100,000.00 15 Retained earnings 785,000.00 580,000.00 16 Total liabilities and…arrow_forwardQuestion: The following selected data for ABC Corporation for the year ended December 31, 2020, is available to you for preparing the cash flow statement: Cost of goods sold $56,500 Sales revenue $97,300 Amortization expense 14,100 Interest revenue 4,100 Income tax expense 2,300 Dividend revenuearrow_forward
- Consider the following financial data for Terry Enterprises: Balance Sheet as of December 31, 2018 Cash $ 86,000 Accounts payable $ 15,500 Accts. receivable 91,500 Notes payable 93,500 Inventories 65,500 Accruals 19,500 Total current assets $ 243,000 Total current liabilities $ 128,500 Long-term debt 162,500 Net plant & equip. 419,500 Common equity 371,500 Total assets $ 662,500 Total liab. & equity $ 662,500 Statement of Earnings for 2018 Industry Average Ratios Net sales $ 642,500 Current ratio 2.2× Cost of goods sold 482,000 Quick ratio 1.7× Gross profit $ 160,500 Days sales outstanding 44 days Operating expenses 119,500 Inventory turnover 6.7× EBIT $ 41,000 Total asset turnover 0.6× Interest expense 14,500 Net profit margin 7.2% Pre-tax earnings $ 26,500…arrow_forwardhelp mearrow_forwardSelected financial data for Wilmington Corporation is presented below. WILMINGTON CORPORATION Balance Sheet Dec. 31, Year 7 Dec. 31, Year 6 Current Assets Cash and cash equivalents $519,159 $274,579 Marketable securities 166,106 187,064 Accounts receivable (net) 232,548 260,190 Inventories 382,044 352,022 Prepaid expenses 49,832 22,958 Other current assets 83,053 85,029 Total Current Assets 1,432,742 1,181,842 Property, plant and equipment 1,384,217 625,421 Long-term investment 568,003 425,000 Total Assets $3,384,962 $2,232,263 Current Liabilities Short-term borrowings $306,376 $170,419 Current portion of long-term debt 155,000 168,000 Accounts payable 228,700 257,631 Accrued liabilities 246,292 150,285 Income taxes payable 87,962 161,020 Total Current Liabilities 1,024,330 907,355 Long-term debt 500,000 300,000 Deferred income taxes 193,515 236,164 Total Liabilities 1,717,845 1,443,519 Common stock $425,250…arrow_forward
- Selected financial data for Wilmington Corporation is presented below. WILMINGTON CORPORATION Balance Sheet Dec. 31, Year 7 Dec. 31, Year 6 Current Assets Cash and cash equivalents $576,843 $305,088 Marketable securities 166,106 187,064 Accounts receivable (net) 258,387 289,100 Inventories 424,493 391,135 Prepaid expenses 55,369 25,509 Other current assets 83,053 85,029 Total Current Assets 1,564,251 1,282,925 Property, plant and equipment 1,384,217 625,421 Long-term investment 568,003 425,000 Total Assets $3,516,471 $2,333,346 Current Liabilities Short-term borrowings $306,376 $170,419 Current portion of long-term debt 155,000 168,000 Accounts payable 254,111 286,257 Accrued liabilities 273,658 166,983 Income taxes payable 97,735 178,911 Total Current Liabilities 1,086,880 970,570 Long-term debt 500,000 300,000 Deferred income taxes 215,017 262,404 Total Liabilities 1,801,897 1,532,974 Common stock $425,250…arrow_forwardVictor Corporation's comparative balance sheet for current assets and liabilities was as follows: Line Item Description Dec. 31, 20Y2 Dec. 31, 20Y1 Accounts receivable $13,400 $12,800 Inventory 57,300 58,000 Accounts payable 13,600 11,800 Dividends payable 29,000 27,000 Adjust net income of $123,400 for changes in operating assets and liabilities to arrive at net cash flows from operating activities.fill in the blank 1 of 1$arrow_forwardHuluduey Corporation’s comparative balance sheet for current assets and liabilities was as follows: Dec. 31, Year 2 Dec. 31, Year 1 Accounts receivable $31,340 $27,670 Inventory 17,180 16,090 Accounts payable 16,510 14,340 Dividends payable 51,850 49,250 Adjust net income of $211,930 for changes in operating assets and liabilities to arrive at net cash flow from operating activities. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash outflows, cash payments, decreases in cash and for any adjustments, if required. Amount Descriptions Cash paid for dividends Decrease in accounts payable Decrease in accounts receivable Decrease in dividends payable Decrease in inventory Increase in accounts payable Increase in accounts receivable Increase in dividends payable Increase in inventory Net cash flow from operating…arrow_forward
- Intermediate Accounting: Reporting And AnalysisAccountingISBN:9781337788281Author:James M. Wahlen, Jefferson P. Jones, Donald PagachPublisher:Cengage LearningFinancial Accounting: The Impact on Decision Make...AccountingISBN:9781305654174Author:Gary A. Porter, Curtis L. NortonPublisher:Cengage LearningCornerstones of Financial AccountingAccountingISBN:9781337690881Author:Jay Rich, Jeff JonesPublisher:Cengage Learning
- College Accounting (Book Only): A Career ApproachAccountingISBN:9781337280570Author:Scott, Cathy J.Publisher:South-Western College PubPrinciples of Accounting Volume 1AccountingISBN:9781947172685Author:OpenStaxPublisher:OpenStax College