- Blue Company A Major Retailer Of Bicycles And Accessories Operates Several Stores And Is A Publicly Traded Company Th 1 (62.64 KiB) Viewed 51 times
Blue Company, a major retailer of bicycles and accessories, operates several stores and is a publicly traded company. The comparative balance sheet and income statement for Blue as of May 31, 2020, are as follows. The company is preparing its statement of cash flows. BLUE COMPANY COMPARATIVE BALANCE SHEET AS OF MAY 31 2020 2019 Current assets. Cashi $28,200 $19,800 Accounts receivable 74,700 58,500 Inventory 218,100 250,800 Prepaid expenses 9,000 6,900 Total current assets 330,000 336,000 Plant assets Plant assets 598,100 498,300 Less: Accumulated depreciation-plant assets 149,000 124,700 Net plant assets 449,100 373,600 $779,100 $709,600 $123,900 $116,100 46,800 72,200 27,100 25,300 197,800 213,600 70,000 100,000 267,800 313,600 370,000 280,000 141,300 116,000 511,300 396,000 $779,100 $709,600 Total assets Current liabilities Accounts payable Salaries and wages payable Interest payable Total current liabilities Long-term debt Bonds payable Total liabilities Stockholders' equity Common stock, $10 par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity
BLUE COMPANY INCOME STATEMENT FOR THE YEAR ENDED MAY 31, 2020 Sales revenue $1,247,300 Cost of goods sold 729,200 Gross profit 518,100 Expenses Salaries and wages expense 251,600 Interest expense 74,500 Depreciation expense 24,300 Other expenses 8,200 Total expenses 358,600 Operating income 159,500 Income tax expense 43,300 Net income $116,200 The following is additional information concerning Blue's transactions during the year ended May 31, 2020. 1. All sales during the year were made on account. 2. All merchandise was purchased on account, comprising the total accounts payable account. 3. Plant assets costing $99,800 were purchased by paying $28,800 in cash and issuing 7,100 shares of stock. 4. The "other expenses" are related to prepaid items. 5. All income taxes incurred during the year were paid during the year. 6. In order to supplement its cash, Blue issued 1,900 shares of common stock at par value. 7. Cash dividends of $90,900 were declared and paid at the end of the fiscal year.
(b) Prepare a statement of cash flows for Blue Company for the year ended May 31, 2020, using the direct method. (A reconciliation of net income to net cash provided is not required.) (Show amounts in the investing and financing sections that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis e.g. (15,000).) BLUE COMPANY Statement of Cash Flows (Partial) Cash payments: V v V $ $
Using the indirect method, calculate only the net cash flow from operating activities for Blue Company for the year ended May 31, 2020. (Show amounts that decrease cash flow with either a-sign e.g. -15,000 or in parenthesis e.g. (15,000).) BLUE COMPANY Statement of Cash Flows (Partial) V Adjustments to reconcile net income to $ $ $