Based on the Following Income Statement and Balance Sheet for Rashid

question 161

Essay

Based on the following income statement and balance sheet for Rashid Corporation, determine the cash flows from operating activities using the indirect method.
$\begin{array}{c} \text { RASHID CORPORATION } \\ \text { Income Statement } \\ \text { For Year Ended December 31, 2013 } \\\begin{array}{|l|r|r|}\hline \text { Sales } & & \$ 504,000 \\\hline \text { Cost of goods sold } & \$ 327,600 & \\\hline \text { Depreciation expense } & 42,000 & \\\hline \text { Other operating expenses } & 125,500 & (495,100) \\\hline \text { Other gains (losses): }\\\hline{\text { Gain on sale of equipment }} && \underline{7,200} \\\hline \text { Income before taxes } & & \$ 16,100 \\\hline \text { Income tax expense } & & (4,800) \\\hline \text { Net income } & & \$ 11,300\\\hline\end{array}\end{array}$

$\begin{array}{c} \text { RASHID CORPORATION } \\ \text { Balance Sheets } \\ \text { At December 31 } \\\begin{array}{|l|r|r|}\hline &2013&2012\\\hline \text { Assets }\\\hline \text { Cash } & \$ 64,650 & \$ 55,800 \\\hline \text { Accounts receivable } & 21,000 & 29,000 \\\hline \text { Inventory } & 58,000 & 52,100 \\\hline \text { Equipment } & 240,000 & 222,000 \\\hline \text { Accumulated depreciation } & (106,000) & (96,000) \\\hline \text { Total assets } & \$ 277,650 & \$ 262,900 \\\hline \\\hline \text { Liabilities: }\\\hline \text { Accounts payable } & \$ 28,400 & \$ 23,700 \\\hline \text { Income taxes payable } & \underline{1,050} & \underline{1,200} \\\hline \text { Total liabilities } & \$ 29,450 & \$ 24,900 \\\hline \text { Equity }\\\hline \text { Common stock } & \$ 106,000 & \$ 106,000 \\\hline \text { Contributed Capital in excess of par value } & 18,000 & 18,000 \\\hline \text { Retained earnings } & \underline{124,200} & \underline{114,000} \\\hline \text { Total equity } & \$ 248,200 & \$ 238,000 \\\hline \text { Total liabilities and equity } & \$ 277,650 & \$ 262,900 \\\hline\end{array}\end{array}$

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Definitions:

Twin Compounds

Innovative materials or tires that use two distinct rubber compounds to offer a balance between grip, durability, and performance.

Main Section

The principal or most important part or segment of a document, machine, or area.

All-Wheel Drive (AWD)

A term used to describe a vehicle drive configuration used to drive more than one axle in pickup trucks and automobiles but usually describes a three-axle drive system in heavy-duty trucks.

Four Axle Truck

A heavy-duty truck configuration featuring four sets of axles, increasing load capacity and distribution.