Select Page
  

Problem – Chapter 12(Learning Objectives 2, 3, 4: Prepare the statement of cash flows—direct and indirect methods) To prepare the statement of cash flows, accountants for Vinson Electric Company have summarized 2016 activity in two accounts:: CashBeginning balance61,500Payments on accounts payable446,000Sale of long-term investment21,300Payments of dividends27,900Collections from customers681,500Payments of salaries and wages139,200Issuance of common stock47,600Payments of interest25,500Receipts of dividends16,900Purchase of equipment31,700Payments of other operating expenses34,100Payment of long-term note payable41,100Purchase of treasury stock20,700Payment of income tax20,100Ending Balance42,500Common StockBeginning balance84,100Issuance for cash47,600Issuance to acquire land90,300Issuance to retire note payable25,000Ending Balance247,000Vinson Electric’s 2016 income statement and balance sheet data follow:Vinson Electric CompanyIncome StatementYear Ended December 31,2016Revenues: Sales revenue$689,200 Dividend revenue16,900 Total revenue706,100Expenses and losses: Cost of goods sold$447,200 Salary and wage expense126,400 Depreciation expense19,900 Other operating expense49,400 Interest expense27,800 Income tax expense17,100 Loss on sale of investments1,100 Total expenses and losses688,900Net income$ 17,200Vinson Electric CompanySelected Balance Sheet DataDecember 31, 2016Increase(Decrease)Current assets: Cash and cash equivalents$ (23,000) Account receivable7,700 Inventories(9,000) Prepaid expenses(5,000)Land90,300Equipment, net11,800Long-term investments(22,400)Current liabilities: Accounts payable(7,800) Interest payable2,300 Salary payable(12,800) Other accrued liabilities10,300 Income tax payable(3,000)Long-term not payable(66,100)Common stock162,900Retained earnings(15,700)Treasury stock20,700