27 josephine company had net income of 21 850 for the year ended december 31 2015 ad 4307845

27 josephine company had net income of 21 850 for the year ended december 31 2015 ad 4307845

27) Josephine Company had net income of $21,850 for the year ended December 31, 2015.  Additional information from the income statement follows:

Depreciation expense$8,400

Interest expense3,900

Income tax expense5,700

The company also reported the following balances:

DecemberDecember

31, 2014                  31, 2015

Accounts receivable$10,000$11,800

Accounts payable$20,000$23,200

Income taxes payable$22,000$21,300

Inventory$30,000$25,000

Required:

Prepare the operating activities section of the statement of cash flows for the year ended December 31, 2015.  Use the indirect method.

28) The income statement and comparative balance sheets for SSS Company are presented below:

SSS Company

Income Statement

For the Year Ended December 31, 2015

Sales$586,000

Cost of goods sold311,000

Depreciation expense14,000

Amortization expense3,000

Wage expense88,000

Rent expense24,000

Loss on sale of fixed assets2,600

Interest expense4,900

Income tax expense56,000

Total expenses503,500

Net income$82,500

December 31, 2014          December 31, 2015

Cash$16,300$19,900

Accounts receivable27,90036,300

Inventory53,90048,200

Prepaid rent1,8002,000

Land22,00032,000

Fixed assets118,000130,000

Accumulated depreciation(39,000)(46,000)

Patent11,00012,000

Total assets$211,900$234,400

Accounts payable21,10027,700

Wages payable5,7006,200

Interest payable4001,600

Taxes payable7,9006,800

Bonds payable, due 202036,00044,000

Common stock32,00035,000

Retained income108,800113,100

Total liabilities and

Stockholders' equity$211,900$234,400

Required:

Prepare a statement of cash flows using the indirect method for the year ended December 31, 2015.  No land was sold in 2015.  Land was purchased using bonds payable for $8,000 and cash for $2,000.  A fixed asset was sold in 2015 for $4,100.

Net income$82,500

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