During 2014,Waggoner Company Performed Services for Which Customers Paid or Promised

question 10

Essay

During 2014,Waggoner Company performed services for which customers paid or promised to pay $587,000.Of this amount,$552,000 had been collected by year end.Waggoner paid $340,000 in cash for employee wages and owed the employees $15,000 at the end of the year for work that had been done but had not paid for.Waggoner paid interest expense of $3,000 and $195,000 for other service expenses.The income tax rate was 35%,and income taxes had not yet been paid at the end of the year.Waggoner declared and paid dividends of $20,000.There were no other events that affected cash.
Required:
1.What was the amount of the increase or decrease in cash during the year?
2.Prepare an income statement for Waggoner for the year (December 31 year-end).
3.Prepare a statement of cash flows for the year (December 31 year-end)

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Definitions:

Act Deontology

Ethical theory suggesting actions are morally right or wrong based on adherence to specific rules, rather than consequences.

Moral Principles

Fundamental beliefs regarding right and wrong that guide behavior and decision-making processes.

Utilitarianism

An ethical theory suggesting that the best action is the one that maximizes utility, usually defined as that which produces the greatest well-being of the greatest number of people.

Pharmaceutical Industry

A sector dedicated to the discovery, development, production, and marketing of drugs and medications.