For all problems you must use an Excel worksheet for the answers. Be sure to show all computations.
Problem #1
Based on an analysis of the financial statements, the following information is available for the Dun-Wrong Construction Company’s cash flows for the year ended December 31, 210X.
Cash sales for the year were $1,250,000.
Credit sales for the year were $2,000,000. 75% of the credit sales were collected in the current year.
Last year’s uncollectible accounts receivable were $35,000.
Accounts receivable decreased by $20,000.
Inventory increased by $10,000.
Accounts payable increased by $15,000.
Net income reported was $225,000.
Depreciation and amortization expenses reported were $75,000.
The book value of assets sold this year was $50,000. There was a $5,000 gain on the sale reported.
Cash payments to creditors, employees, etc. were $2,250,000.
The accrued expenses at year end were $10,000.
Income taxes accrued this year were $35,000.
Income taxes paid from last year’s profits were $30,000.
Fixed assets purchased this year were $240,000. 50% of the purchase was made in cash.
Note receivable collections for the year were $25,000 for the principal and $3,000 for the interest.
Bonds were exchanged for land and a building. The fair market value of bonds was $500,000. Interest is paid on an annual rate of *%, but is paid semi-annual interest payment was made during the year.
Loan payments made to the bank were $50,000. This included interest in the amount of $4,500.
Dividends in the amount of $50,000 were declared on December 15th.
Dividends declared last year, but paid this year, was $25,000.
Cash and cash equivalents at the beginning of the year was $44,000.
Required: Prepare, in good form, a formal statement of cash flows, using the “Direct Method”
Problem #2
The bank statement for Steve’s Service, Inc., as of June 30th, 201X, shows a balance of $54,780. The general ledger shows a balance of $68,757.
Other data”
Check #748 in the…