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(solution) Hello. P12-7A Financial Accounting, Tools for Business Decision


Hello. P12-7A Financial Accounting, Tools for Business Decision Making, Kimmel, Weygandt & Kieso, and 7th Edition

I Need B1-B2-B3 Complete. I believe I have the first part correct. The file is attached.


Name:

 

Instructor: Ingalls Date:

 

Course: BUA 201

 

Financial Accounting: Chapter 12 Homework P12-7A, Prepare a statement of cash flows?indirect method, and compute cash-based ratios.

 

Presented below are the financial statements of Kurtzel Company.

 

KURTZEL COMPANY

 

Comparative Balance Sheets

 

December 31

 

Assets

 

2014

 

2013

 

Cash

 

$35,000

 

$20,000

 

Accounts receivable

 

20,000

 

14,000

 

Inventory

 

28,000

 

20,000

 

Property, plant, and equipment

 

60,000

 

78,000

 

Accumulated depreciation

 

(32,000)

 

(24,000)

 

Total

 

$111,000

 

$108,000

 

Liabilities and Stockholders? Equity

 

Accounts payable

 

$19,000

 

$15,000

 

Income taxes payable

 

7,000

 

8,000

 

Bonds payable

 

17,000

 

33,000

 

Common stock

 

18,000

 

14,000

 

Retained earnings

 

50,000

 

38,000

 

Total

 

$111,000

 

$108,000

 

KURTZEL COMPANY

 

Income Statement

 

For the Year Ended December 31, 2014

 

Sales

 

Cost of goods sold

 

Gross profit

 

Selling expenses

 

Administrative expenses

 

Income from operations

 

Interest expense

 

Income before income taxes

 

Income tax expense

 

Net income $242,000

 

175,000

 

67,000

 

$18,000

 

6,000 24,000

 

43,000

 

3,000

 

40,000

 

8,000

 

$32,000 Additional data:

 

1. Depreciation expense was

 

$17,500

 

2. Dividends declared and paid were

 

$20,000

 

$8,500

 

cash. This equipment cost

 

3. During the year equipment was sold for

 

originally and had accumulated depreciation of

 

$9,500

 

at the time of sale. $18,000 Name:

 

Instructor: Ingalls Date:

 

Course: BUA 201 Instructions:

 

(a) Prepare a statement of cash flows using the indirect method. Cash flows from operating activities

 

Net income

 

Adjustments to reconcile net income to net cash

 

provided by operating activities

 

Depreciation

 

Increase in accounts payable

 

Decrease in income taxes payable

 

Increase in accounts feceivable

 

Increase in inventory

 

Net cash by operating activities $32,000 $17,500

 

4,000

 

(1,000)

 

(6,000)

 

(8,000) Cash flows from investing activities

 

Proceeds from sale of equipment 6,500

 

38,500 8,500 Cash flows from financing activities

 

Issuance of common stock

 

Redemption of bonds

 

Payment of cash dividends

 

Net cash used by financing activities 4,000

 

(16,000)

 

(20,000)

 

(32,000) Net cash flow

 

Cash at beginning of period

 

Cash at end of period 15,000

 

20,000

 

$35,000

 

Calculation here as desired

 

Calculation here as desired (b) (1) Compute the current cash debt coverage ratio.

 

Amount

 

Amount + Amount

 

= Times = ÷ Times Number

 

(b) (2) Compute the cash debt coverage ratio.

 

Amount

 

Amount + Amount ÷

 

Number (b) (3) Compute the free cash flow.

 

Amount - Amount - Amount = Amount

 


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