Time,Inc_Statement of Cash Flows

Time,Inc_Statement of Cash Flows

Question

Time,Inc_Statement of Cash FlowsTime,Inc_Statement of Cash FlowsTime,Inc_Statement of Cash FlowsTime,Inc_Statement of Cash Flows

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Time,Inc. Income Statement

FortheYearEndedDecember31, 2014

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100% ORIGINAL

Sales 450,000

Costof GoodsSold 300,000

GrossMargin 150,000

Less:

Operating Expenses 60,000

DepreciationExpense 17,000

IncomeTaxes 20,000

InterestExpense

Loss onsaleofplantassets

NetIncome

18,000

3,000 118,000

32,000

1. Thecomparativebalancesheets forTime Companyappearbelow:

Time,Inc.Comparative BalanceSheets December 31

Assets 2014 2013

Cash 41,000 35,000

AccountsReceivable 75,000 53,000

Inventories 120,000 132,000

PrepaidExpenses 19,000 25,000

Investments 100,000 75,000

Plant assets 325,000 250,000

AccumulatedDepreciation

TotalAssets

(65,000) (60,000)

615,000 510,000

Liabilities&Equity

AccountsPayable 93,000 75,000

AccruedExpenses 29,000 24,000

BondsPayable 120,000 160,000

CommonStock 275,000 170,000

RetainedEarnings

TotalLiabilities &Equity

98,000 81,000

615,000 510,000


Additional information

1. Newplantassetscosting$100,000 werepurchasedwithcash.

2. Investmentswerepurchasedwithcash.

3. Oldplantassetscosting$25,000 andwithabookvalueof$13,000 weresoldfor$10,000 cash.

4. Bonds with afacevalueof$40,000 wereconvertedinto$40,000 parvalueofcommonstock.

5. Commonstockwasissuedforcash.

6. Acashdividendof$15,000 was declaredandpaidduringtheyear.

Required

Prepareastatementofcash?owsfortheyearusingtheindirectmethod.