P 4-10 The chief accountant for Grandview Corporation provides you with the company's 2011 statement of cash
p. 224 P 4-10 Integration of financial statements; Chapters 3 and 4
P 4-10 Grandview Corporation
P 4-10 The chief accountant for Grandview Corporation provides you with the company's 2011 statement of cash flows and income statement. The accountant has asked for your help with some missing figures in the company's comparative balance sheets. These financial statements are shown next ($ in millions).
GRANDVIEW CORPORTION Statement of Cash Flows For the Year Ended December 31, 2011 Cash Flows from Operating Activities: Collection from customers $71 Payment to suppliers (30) payment of general & administrative expenses (18) Payment of income taxes (9) Net cash flows from operating activites $14 Cash flows from investing activities: Sale of investments 65 Cash Flows from financing activities: issuance of common stock 10 Payment of dividends (3) Net cash flows from financing activities 7 Net increase in cash $86
GRANDVIEW CORPORTION Income Statements For the Year Ended December 31, 2011 sales revenue 480 Cost of goods sold 32 Gross profit 48 operating expenses: General and administrative $18 Depreciation 10 Total operating expenses 28 operating income 20 other income Gain on sale of investments 15 income before income taxes 25 income tax expense 7 Net income $28
GRANDWIEW CORPORATION Balance Sheets At December 31 2011 2010 Assets: Cash $145 $? Accounts receivable ? 84 Investments – 50 Inventory 60 ? property, plant & equipment 150 150 Less: Accumulated depreciation (65) ? Total assets ? ? Liabilities and Shareholders Equity: Accounts payable to suppliers $40 $30 payables for selling & admin. Expenses 9 9 Income taxes payable 22 ? Common stock 240 230 Retained earnings ? 47 Total liabilities and shareholders’ equity ? ?
1. Calculate the missing amounts
2. Prepare the operating activities section of Grandview's 2011 statement of cash flows using the indirect method.