Based on the Information Provided Below, Complete the Following Worksheet

question 147

Essay

Based on the information provided below, complete the following worksheet to be used to prepare the statement of cash flows:
(a)Net income for the year was $30,000.
(b)Dividends of $10,000 were declared and paid.
(c)Stylish's only noncash expense was depreciation, which totaled $50,000.
(d)The company purchased plant assets for $70,000.
(e)Notes payable in the amount of $40,000 were issued during the year for cash.
(f)Merchandise inventory increased $30,000.
(g)Accounts payable decreased $10,000,
$\begin{array}{c}\text { STYLISH CORPORATION }\\\text { Spreadsheet for Statement of Cash Flows - Indirect Method }\\\text { For Year Ended December 31, 2013 }\\\begin{array}{c} \hline\quad \quad \quad \quad \quad \quad\text { Analysis of Changes }\\\begin{array}{|l|r|r|r|r|r|r|}\hline &12 / 31 / 12 & & \text { Debit } & & \text { Credit } & 12 / 31 / 13 \\\hline \text { Balance Sheet - Debits }\\\hline \text { Cash } & \$ 70,000 & & & & & \$ 60,000 \\\hline \text { Accounts receivable } & 180,000 & & & & & 190,000 \\\hline \text { Merchandise inventory } & 200,000 & & & && 230,000 \\\hline \text { Plant assets } & \underline{500,000} & & & & & \underline{570,000}\\\hline\\\hline \text { Statement of Cash Flows }\\\hline \text { Accumulated depreciation } & \$ 100,000 & & & & & \$ 150,000 \\\hline \text { Accounts payable } & 170,000 & & & & & 160,000 \\\hline \text { Notes payable } & 350,000 & & & & & 390,000 \\\hline \text { Capital stock } & 200,000 & & & & & 200,000 \\\hline \text { Retained earnings } & 130,000 & & & & & 150,000 \\\hline & \underline{\$ 950,000} & & & & & \underline{\$ 1,050,000} \\\hline\\\hline \text { Statement of Cash Flows } \\\hline \text { Operating activities } \\\hline \text { Net income } \\\hline \text { Increase in accounts receivable } \\\hline \text { Increase in merchandise inventory } \\\hline \text { Decrease in accounts payable } \\\hline \text { Depreciation expense } \\\hline \text { Investing activities } \\\hline \text { Cash paid to purchase plant assets } \\\hline \text { Financing activities } \\\hline \text { Cash paid for dividends } \\\hline \text { Cash received from note payable } \\\hline\end{array}\end{array}\end{array}$

---

Definitions:

Weighted-Average Shares

The number of shares outstanding adjusted for changes in share capital, used in calculating earnings per share over a reporting period.

Retained Earnings Statement

A financial statement that outlines the changes in retained earnings for a company over a specific period.

Owners' Equity

The residual interest in the assets of an entity after deducting liabilities, representing the ownership interest of the shareholders.

Net Income

The total earnings of a company after subtracting all expenses and losses from total revenue.