Portions of the financial statements for parnell company are provided below.

Portions of the financial statements for Parnell Company are provided below.

PARNELL COMPANY
Income Statement
For the Year Ended December 31, 2016
($ in 000s)
  Revenues and gains:
       Sales $740
       Gain on sale of buildings 12 $ 752
  Expenses and loss:
       Cost of goods sold $270
       Salaries 114
       Insurance 34
       Depreciation 117
       Interest expense 44
       Loss on sale of machinery 11 590
  Income before tax 162
       Income tax expense 81
  Net income $ 81
        PARNELL COMPANY
       Selected Accounts from Comparative Balance Sheets
       December 31, 2016 and 2015
       ($ in 000s)
  Year
  2016   2015   Change
  Cash $128    $106    $22
  Accounts receivable 318    222    96
  Inventory 327    419    (92 )
  Prepaid insurance 67    82    (15 )
  Accounts payable 204    123    81
  Salaries payable 114    99    15
  Deferred income tax liability 72    58    14
  Bond discount 178    206    (28 )
Required:
1. Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company using the direct method. (Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)

2. Prepare the cash flows from operating activities section of the statement of cash flows for Parnell Company using the indirect method. (Enter your answers in thousands (i.e., 5,000 should be entered as 5). Amounts to be deducted should be indicated with a minus sign.)

Answer

Cashflows from Operating activities (Direct)
Cash collected from customers (740-96) 644
Cash paid to suppliers (270-92-81) -97
Salaries paid (114-15) -99
Insurance paid (34-15) -19
Interest expense (44-28) -16
taxes payable (81-14) -67
Net cashh provided from Operating activities 346
Cashflows from Operating activities (Indirect)
Net icnome for the year 81
Adjustment required for reconciliation
Depreciation 117
Loss on machinery sale 11
Amortization of discount 28
Increase in Accounts receivable -96
Decrease in inventory 92
Decrease in Prepaid insurance 15
Increase in Accounts payable 81
Increase in Salaries payable 15
Increase in Deffered tax liability 14
gain on sale of building -12
Net cash provided from Operating activities 346

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