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Exercise 23-11
Condensed financial data of Windsor Company for 2017 and 2016 are presented below.
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Question & Answer: Condensed financial data of Windsor Company for 2017 and 2016 are presented below……
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| WINDSOR COMPANY COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 |
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| 2017 | 2016 | |||||
| Cash | $1,770 | $1,170 | ||||
| Receivables | 1,790 | 1,320 | ||||
| Inventory | 1,610 | 1,940 | ||||
| Plant assets | 1,910 | 1,680 | ||||
| Accumulated depreciation | (1,200 | ) | (1,190 | ) | ||
| Long-term investments (held-to-maturity) | 1,300 | 1,420 | ||||
| $7,180 | $6,340 | |||||
| Accounts payable | $1,210 | $910 | ||||
| Accrued liabilities | 200 | 240 | ||||
| Bonds payable | 1,370 | 1,560 | ||||
| Common stock | 1,880 | 1,740 | ||||
| Retained earnings | 2,520 | 1,890 | ||||
| $7,180 | $6,340 | |||||
| WINDSOR COMPANY INCOME STATEMENT FOR THE YEAR ENDED DECEMBER 31, 2017 |
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| Sales revenue | $7,010 | |
| Cost of goods sold | 4,730 | |
| Gross margin | 2,280 | |
| Selling and administrative expenses | 930 | |
| Income from operations | 1,350 | |
| Other revenues and gains | ||
| Gain on sale of investments | 80 | |
| Income before tax | 1,430 | |
| Income tax expense | 540 | |
| Net income | 890 | |
| Cash dividends | 260 | |
| Income retained in business | $630 | |
Additional information:
During the year, $70 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017.
Prepare a statement of cash flows using the indirect method.
Expert Answer
| Statement of cash flow | ||
| Cash flows from operating activities | ||
| Net Income | $890 |
