Location via proxy:   [ UP ]  
[Report a bug]   [Manage cookies]                
Scribd
Upload
71 views

Cash Flow Example

The document provides financial statements for Blazeland Inc. for the years ending 2009 and 2010. It includes a balance sheet, income statement, and additional information. The student is instructed to prepare a cash flow statement using the direct method and indirect method based on this information. They are provided an excel template to complete the cash flow statements.

Uploaded by

Alhassan Shakir
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
71 views

Cash Flow Example

The document provides financial statements for Blazeland Inc. for the years ending 2009 and 2010. It includes a balance sheet, income statement, and additional information. The student is instructed to prepare a cash flow statement using the direct method and indirect method based on this information. They are provided an excel template to complete the cash flow statements.

Uploaded by

Alhassan Shakir
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 2

Accounting Term 2 Mr. Nadim and Ms.

Nanor
Week 5 – Cash flow example (Direct and Indirect Method)

Use the following information from Blazeland Inc financial statements to


complete the cash flow statement using the direct and indirect methods on
the excel template provided
The condensed financial statements of Blazeland, Inc., appear below:

BLAZELAND, INC.
Balance Sheet
December 31

Assets 2010 2009


Cash $ 70,559 $ 41,050
Accounts receivable 65,000 62,000
Inventories 120,060 123,700
Prepaid expenses 6,500 6,200
Long-term equity securities 54,180 46,000
Property, plant, and equipment 245,000 240,000
Accumulated depreciation    (74,500)    (72,000)
$486,799 $446,950
======= =======
Liabilities and Shareholders' Equity
Accounts payable $ 46,800 $ 41,000
Accrued expenses payable 17,000 15,500
Income taxes payable 1,250 1,750
Bonds payable 95,000 110,000
Common shares 175,000 175,000
Retained earnings    151,749    103,700
$486,799 $446,950
======= =======
BLAZELAND, INC.
Income Statement
Year Ended December 31, 2010

Sales $ 543,950
Cost of goods sold    345,000
Gross profit 198,950
Operating expenses $38,500
Depreciation expense 46,500
Loss on sale of equipment     7,150     92,150
Profit from operations 106,800
Less: Interest expense $2,730
Add: Gain on sale of long-term equity
     4,000       1,270
securities
Profit before income tax 108,070
Income tax expense     32,421
Profit $ 75,649
=======
Additional information:
1. New equipment costing $71,000 was purchased for cash during the year.
2. Long-term equity securities were sold for cash of $9,820. The fair value of the
Accounting Term 2 Mr. Nadim and Ms. Nanor
Week 5 – Cash flow example (Direct and Indirect Method)
securities equaled their carrying amount at year end.
3. A cash dividend of $27,600 was declared and paid during the year.
4. Accounts payable relate only to merchandise creditors.
5. Interest expense was paid in cash during the year.

Instructions
A Prepare a cash flow statement using the direct method.
B Prepare a cash flow statement using the indirect method.

You might also like