bulls ltd has a december 31 fiscal year end and the controller of the company is cur 536833
Bulls Ltd. has a December 31 fiscal year-end, and the controller of the company is currently completing the financial statements of the company in order to present them at the next board meeting. He completed most of the work, but did not get around to finishing the cash flow statement. He gives you the following financial information in order for you to help him with the preparation of the cash flows.
Balance sheet
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bulls ltd has a december 31 fiscal year end and the controller of the company is cur 536833
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|
2010 |
2009 |
|
|
Cash |
£ 38,500 |
£ 8,000 |
|
Accounts receivable, net |
20,000 |
29,500 |
|
Merchandise inventory |
37,000 |
38,000 |
|
Prepaid Insurance |
9,500 |
15,000 |
|
Land |
54,500 |
40,600 |
|
Equipment, at cost |
104,500 |
90,700 |
|
Less: Accumulated amortisation |
(30,500) |
(15,500) |
|
Patent |
49,000 |
53,200 |
|
Total assets |
£ 282,500 |
£ 259,500 |
|
|
|
|
|
Accounts payable |
£ 58,500 |
£ 42,000 |
|
Income taxes payable |
16,500 |
11,500 |
|
Advertising payable |
5,000 |
|
|
Dividends payable |
40,000 |
10,000 |
|
Notes payable |
40,000 |
83,000 |
|
Share capital |
93,000 |
78,500 |
|
Retained earnings |
29,500 |
34,500 |
|
Total liabilities and shareholders’ equity |
£ 282,500 |
£ 259,500 |
|
Sales |
£ 1,090,000 |
|
Cost of goods sold |
672,000 |
|
Gross profit |
418,000 |
|
Operating expense |
|
|
Salaries expense |
195,000 |
|
Advertising expense |
35,000 |
|
Rent expense |
67,500 |
|
Insurance expense |
34,500 |
|
Amortisation expense |
25,000 |
|
Total operating expenses |
357,000 |
|
Income from operations |
61,000 |
|
Interest expense |
2,500 |
|
Gain on sale of equipment |
7,500 |
|
Income before income taxes |
66,000 |
|
Income tax expense |
4,000 |
|
Net income |
£ 62,000 |
Additional information:
1.Bulls Ltd. purchased equipment of £36,300 in cash during the year.
2.Bulls Ltd. sold equipment for cash during the year.
3.No patent has been purchased nor sold in the year.
4.Accounts payable relates solely to transactions with suppliers for inventory.
Complete the following:
1.Prepare a complete cash flow statement using the indirect method for the 2010 fiscal year.
2. Compute the following amounts:
1. Cash collected from clients during the year
2.Cash paid for advertising expense
3. Cash paid to suppliers for inventory
Attachments:
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