Mary Kay Cosmetics
Selected data and additional information from the company's records are presented below:
Balance Slicet Data Cash Accountsreceivable Inventories Accounts payable Salaries payable Equipment Accumulated depreciation Bondspayable Common stock Retained earnings Income Statement Data Net sales Cost of goods sold Operating expense (excluding depreciation expense) Net income (Includes depreciation expense and gain) Gain on sale of equipment 2014$235,000$120,00056,00038,00010,000110,00028,000100,000300,00076,0002013246,000$150,00050,00070,0005,00070,00032,000200,000200,000400,0002014$920,000700,000160,00056,0004,000 Additional information:
1. Equipment with a cost of $30,000 and a book value of $18,000 was sold for $22,000 during 2014 .
2. Common stock was issued to retire bonds payable duing 2014 .
3. The only items affecting retained earnings in 2014 were net income and dividends declared and paid. Refer to Mary Kay Cosmetics.Prepare the company's statement of cash flows for the year ended December 31,2014.Use the indirect method of determining net cash flows from operating activities.
Definitions:
Economic Profit
The gap between a company's total earnings and its combined explicit and implicit expenses.
Total Output
The total quantity of goods or services produced by an economy, firm, or production process within a given period.
Total Revenue
The complete amount of money received by a company or organization from its business activities, such as sales of goods or services, before any expenses are subtracted.
Total Cost
The complete cost of production, including both fixed and variable costs.