ACT 3392 Troy University G Company Cash Flow Statement Report

• A quation about intermediate accoutning
• I will provide an entire quation in a word doucument
• (10 points) G Company’s 2018 and 2019 balance sheets and 2019 income statement follow:

12-31-1812-31-19

Cash$700,000$2,043,000

Accounts receivables, net1,200,000800,000

Prepaid items100,000138,000

Investments0412,000

Plant assets3,800,0004,600,000

Accumulated depreciation(1,000,000)(1,400,000)

$4,800,000$6,593,000

Short-term debt200,000750,000

Accounts payable100,000100,000

Accrued liabilities300,17088,000

Cash dividends payable100,000105,000

Bonds payable, net298,830496,000

Common stock ($1 par value)100,000100,000

Additional paid-in-capital, common stock1,400,0001,400,000

Treasury stock(75,000)(95,000)

Retained earnings2,376,0003,649,000

$4,800,000$6,593,000

Sales$19,000,000

Operating expenses 16,800,000

Other income/gains/losses, net18,406

Interest expense29,000

Income before taxes2,189,406

Income tax expense496,406

Net income$1,693,000

Additional information for G follows:

• On 01-01-19, G paid $400,000 for 60% of Zima Company’s outstanding common stock. During 2019, Zima reported net income of $20,000.
• On 07-01-19, G sold a plant asset for $75,000. G had acquired the plant asset on 01-01-15 for $500,000. On this particular asset, G estimated a 5-year useful life and no salvage value. G depreciates its plant assets using a straight-line method and records depreciation expense to the nearest full month.
• During 2019, G recorded a $15,000 impairment loss on one of its plant assets.
• On 12-31-14, G issued $300,000 of its 6%, 5-year term bonds. The bonds pay interest every 06-30 and 12-31. At the time G issued the bonds, similar bonds paid 6.25% interest. At the time of issuance, G incurred and paid $2,000 of bond issuance costs. On 06-30-19, after making its semi-annual interest payment, G retired the bonds at 101.
• On 12-31-19, G issued $500,000 of its 2%, 5-year term bonds. The bonds pay interest every 06-30 and 12-31. At the time G issued the bonds, similar bonds paid 2% interest. At the time of issuance, G incurred and paid $4,000 of bond issuance costs.
• On 08-04-19, G bought back some of its outstanding common stock. For 2019, this was G’s only treasury stock transaction. In the past, G has only bought back its common stock; it has never reissued any of its treasury stock.
• During 2019, G declared and distributed cash dividends on its outstanding common stock.
• On G’s income statement, the “Other income/gains/losses, net” caption consists of gains/losses on fixed asset sales, gains/losses on bond retirements, and impairment losses.
• G records adjusting journal entries only once a year as of year-end.

Prepare a statement of cash flows for G the year ended 12-31-19. G uses the indirect method. Label your section answers as provided by OR used in. In your reconciliation of net income to cash flows from operating activities, be specific in your reconciling items. Also, be sure to support your reconciling item amounts with journal entries and/or amortization schedules and/or other supporting calculations that you deem appropriate.