ACC 230 4.5. The following comparative balance sheets and income statement are available for Little Bit Inc
ACC 230 4.5Little Bit Inc
Create your own statement of cash flows for problem 4.5 on p. 141(ch.4). Include your completed statement of cash flows and a 200-300 word analysis of the statement.
4.5. The following comparative balance sheets and income statement are available for Little Bit Inc.
Prepare a statement of cash flows for 2009 using the indirect method and analyze the statement.
December 31,
2009 2008
Cash $40,000 $24,000
Accounts receivable (net) 48,000 41,500
Inventory 43,000 34,500
Prepaid expenses 19,000 15,000
Total Current Assets $150,000 $115,000
Plant and equipment $67,000 $61,000
Less accumulated depreciation (41,000) (23,000)
Plant and equipment (net) $26,000 $38,000
Long-term investments 90,000 89,000
Total Assets $266,000 $242,000
Accounts Payable $13,000 $11,000
Accrued liabilities 55,000 71,000
Total Current Liabilities $68,000 $82,000
Long-term debt 25,000 8,000
Deferred taxes 4,000 3,500
Total Liabilities $97,000 $93,500
Common stock ($1 par) and additional paid-in capital 112,000 97,000
Retained earnings 57,000 51,500
Total Liabilities and Equity $266,000 $242,000
Income Statement for 2009
Sales $155,000
Cost of goods sold 83,000
Gross profit $72,000
Selling and administrative $45,000
Depreciation 18,000
Operating Profit 63,700
Interest expense $8,300
Earnings before tax 2,000
Tax expense $6,300
Net income $5,500
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