Power Corporation owns 75 percent of Surge Company’s stock; no intercompany purchases or sales were made...
Power Corporation owns 75 percent of Surge Company’s stock; no
intercompany purchases or sales were made in 20X4. For the year,
Power and Surge reported sales of $360,000 and $200,000 and cost of
goods sold of $150,000 and $95,000, respectively. Power’s inventory
increased by $33,000, but Surge’s decreased by $15,000. Power’s
accounts receivable increased by $19,000 and its accounts payable
decreased by $19,000 during 20X4. Surge’s accounts receivable
decreased by $14,000 and its accounts payable increased by
$5,000.
Required:
Assuming there were no other cash flows from operations, using the
direct method of computing cash flows from operating activities,
compute the following:
Power Corporation owns 75 percent of Surge Company’s stock; no
intercompany purchases or sales were made in 20X4. For the year,
Power and Surge reported sales of $360,000 and $200,000 and cost of
goods sold of $150,000 and $95,000, respectively. Power’s inventory
increased by $33,000, but Surge’s decreased by $15,000. Power’s
accounts receivable increased by $19,000 and its accounts payable
decreased by $19,000 during 20X4. Surge’s accounts receivable
decreased by $14,000 and its accounts payable increased by
$5,000.
Required:
Assuming there were no other cash flows from operations, using the
direct method of computing cash flows from operating activities,
compute the following:
A. Cash received from customers
B. Cash payment to suppliers
C. Cashflow from operating activities
Homework Answers
1. Cash received from customer:
| Power | Surge | Total | |
| Sales | $360,000 | $200,000 | |
| Add: Decrease in accounts receivable | 14,000 | ||
| Less: Increase in accounts receivable | (19,000) | ||
| Cash received from customer | $341,000 | $214,000 | $555,000 |
2. Cash payment to supplier:
| Power | Surge | Total | |
| Cost of goods sold | $150,000 | $95,000 | |
| Add: Increase in inventory | 33,000 | ||
| Less: Decrease in inventory | (15,000) | ||
| Less: Increase in accounts payable | (5,000) | ||
| Add: Decrease in accounts payable | 19,000 | ||
| Total | $202,000 | $75,000 | $277,000 |
3. Cash flow from operating activities:
| Cash received from customer | $555,000 |
| Less: Cash payment to supplier | 277,000 |
| Cash flow from operating activities | $278,000 |
Add Answer to:
Power Corporation owns 75 percent of Surge Company’s stock; no
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Service revenue
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Operating expenses (excluding
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Income tax expense
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HELP ME SOLVE THIS Sales revenue $7,522,100 Cost of goods sold Beginning inventory $1,869,400 Purchases 4,492,900...
HELP ME SOLVE THIS
Sales revenue
$7,522,100
Cost of goods sold
Beginning inventory
$1,869,400
Purchases
4,492,900
Goods available for sale
6,362,300
Ending inventory
1,321,200
Total cost of goods sold
5,041,100
Gross profit
2,481,000
Operating expenses
1,112,800
Net income
$1,368,200
Additional information:
1.
Accounts receivable increased $204,100 during the year, and
inventory decreased $548,200.
2.
Prepaid expenses increased $166,800 during the year.
3.
Accounts payable to suppliers of merchandise decreased $346,900
during the year.
4.
Accrued expenses payable decreased $109,600 during...
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Sunland Corporation had the following activities in
2017.
Concord Company’s income
statement for the year ended December 31, 2017, contained the
following condensed information.
Service revenue
$843,000
Operating expenses (excluding
depreciation)
$622,000
Depreciation expense
60,000
Loss on sale of
equipment
26,000
708,000
Income before income
taxes
135,000
Income tax expense
40,000
Net income
$95,000
Concord’s balance sheet contained the following comparative data at
December 31.
2017
2016
Accounts receivable
$36,000
$55,000
Accounts payable
43,000
33,000
Income taxes payable
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HELP ME SOLVE THIS
Sales revenue
$7,522,100
Cost of goods sold
Beginning inventory
$1,869,400
Purchases
4,492,900
Goods available for sale
6,362,300
Ending inventory
1,321,200
Total cost of goods sold
5,041,100
Gross profit
2,481,000
Operating expenses
1,112,800
Net income
$1,368,200
Additional information:
1.
Accounts receivable increased $204,100 during the year, and
inventory decreased $548,200.
2.
Prepaid expenses increased $166,800 during the year.
3.
Accounts payable to suppliers of merchandise decreased $346,900
during the year.
4.
Accrued expenses payable decreased $109,600 during...
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