Condensed financial data of Arma Inc. follow.?
Condensed financial data of Arma Inc. follow.
ARMA INC.
Income Statement
For the Year Ended December 31, 2011
Sales $392,780
Less:
Cost of goods sold $135,460
Operating expenses, excluding
depreciation 12,410
Depreciation expense 46,500
Income taxes 27,280
Interest expense 4,730
Loss on sale of plant assets 7,500 233,880
Net income $158,900
ARMA INC.
Comparative Balance Sheets
December 31
Assets 2011 2010
Cash $ 90,800 $ 48,400
Accounts receivable 92,800 33,000
Inventories 112,500 102,850
Prepaid expenses 28,400 26,000
Investments 138,000 114,000
Plant assets 270,000 242,500
Accumulated depreciation (50,000) (52,000)
Total $682,500 $514,750
Liabilities and Stockholders’ Equity
Accounts payable $112,000 $ 67,300
Accrued expenses payable 16,500 17,000
Bonds payable 110,000 150,000
Common stock 220,000 175,000
Retained earnings 224,000 105,450
Total $682,500 $514,750
Additional information:
1. New plant assets costing $85,000 were purchased for cash during the year.
2. Old plant assets having an original cost of $57,500 were sold for $1,500 cash.
3. Bonds matured and were paid off at face value for cash.
4. A cash dividend of $40,350 was declared and paid during the year.
Instructions
Prepare a statement of cash flows using the direct method.
Comments
ARMA INC.
Statement of Cash Flows
For the Year Ended December 31, 2007
Cash flows from operating activities
Cash receipts from customers $332,980 (1)
Less cash payments:
To suppliers $100,410 (2)
For operating expenses 15,310 (3)
For income taxes 27,280
For interest 4,730 147,730
Net cash provided by operating
activities 185,250
Cash flows from investing activities
Sale of plant assets 1,500
Purchase of plant assets (85,000 )
Purchase of investments (24,000 )
Net cash used by investing
activities (107,500 )
Cash flows from financing activities
Sale of common stock 45,000
Payment of cash dividends (40,350 )
Redemption of bonds (40,000 )
Net cash used by financing
activities (35,350)
Net increase in cash 42,400
Cash at beginning of period 48,400
Cash at end of period $ 90,800
Computations:
(1) Cash receipts from customers
Sales $392,780
Deduct: Increase in accounts receivable (54,800)
Cash receipts from customers $332,980
(2) Cash payments to suppliers
Cost of goods sold $135,460
Add: Increase in inventory 9,650
Cost of purchases 145,110
Deduct: Increase in accounts payable (44,700)
Cash payments to suppliers $100,410
(3) Cash payments for operating expenses
Operating expenses exclusive of
depreciation $12,410
Add: Increase in prepaid expenses $2,400
Decrease in accrued expenses
payable 500 2,900
Cash payment for operating
expenses $15,310
Arma Inc
plainly which you're suffering unnecessarily with this question. I wish there have been greater to flow on from this end yet i've got confidence you're searching for earnings in the previous pastime, Depreciation and Amortization (EBITIDA) a uncomplicated term in accounting. hence, purely take your 2011 projection (professional-forma) of $158,900.00 internet working earnings and upload returned to that variety your pastime paid, earnings taxes paid, depreciation volume, amortization , if any (I see none) after which you will have the real EBITIDA of the corporation. My situation with those numbers is a private one: the kind wherein this is provided above calls for fairly concept, and if i'm incorrect, sorry, purely ask returned. In corporation you are trying this workout fairly often.
100% correct! Thanks