Problem 12-13 Statement of Cash Flows—Direct Method Lang Company has not yet prepared a formal…


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Problem 12-13 Statement of Cash Flows—Direct Method Lang Company has not yet prepared a formal… 1 answer below » Problem 12-13 Statement of Cash Flows—Direct Method Lang Company has not yet prepared a formal statement of cash flows for 2014. Following are comparative balance sheets as of December 31, 2014 and 2013, and a statement of income and retained earnings for the year ended December 31, 2014: Lang Company Balance Sheet December 31 (thousands omitted) View complete question » Assets 2014 2013 Current assets: Cash $      60 & Problem 12-13 Statement of Cash Flows—Direct Method Lang Company has not yet prepared a formal statement of cash flows for 2014. Following are comparative balance sheets as of December 31, 2014 and 2013, and a statement of income and retained earnings for the year ended December 31, 2014: Lang Company Balance Sheet December 31 (thousands omitted) Assets 2014 2013 Current assets: Cash $      60 $   100 U.S. Treasury bills  (six-month) 0 50 Accounts receivable 610 500 Inventory 720 600 Total  current assets $1,390 $1,250 Long-term assets: Land $      80 $      70 Buildings  and equipment 710 600 Accumulated depreciation (180) (120) Patents (less amortization) 105 130 Total  long-term assets $   715 $   680 Total assets $2,105 $1,930 Liabilities and Owners’  Equity Current liabilities: Accounts payable $   360 $   300 Taxes payable 25 20 Notes payable 400 400 Total current liabilities $   785 $   720 Term notes payable—due 2018 200 200 Total liabilities $   985 $   920 Owners’ equity: Common stock outstanding $   830 $   700 Retained earnings 290 310 Total owners’ equity $1,120 $1,010 Total liabilities and owners’ equity $2,105 $1,930 Lang Company Alternate Problems Statement of Income and Retained Earnings For the Year Ended December 31, 2014 (thousands omitted) Sales $2,408 Less expenses and interest: Cost of goods sold                                                              $1,100 Salaries and benefits                                                               850 Heat, light, and power                                                               75 Depreciation                                                                               60 Property taxes                                                                            18 Patent amortization                                                                   25 Miscellaneous expense                                                              10 Interest                                                                                       55 2,193 Net income before income taxes $   215 Income taxes 105 Net income $   110 Retained earnings—January 1, 2014 310 $   420 Stock dividend distributed 130 Retained earnings—December 31, 2014 $   290 657 Required 1.        For purposes of a statement of cash flows, are the U.S. Treasury bills cash equivalents? If not, how should they be classified? Explain your answers. 2.        Prepare a statement of cash flows for 2014 using the direct method in the Operating Activ- ities section.                                                                                                            (CMA adapted) View less » Jan 29 2016 12:14 PM

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