Any Takers 1

 

Instructions for each section must be fully adhered to.

 

Section 1

 

Instructions for Exercise 13:

 

Prepare a statement of cash flows for 2011 using the indirect method.

 

13)          Here are comparative balance sheets for Taguchi Company.

TAGUCHI COMPANY

Comparative Balance Sheets

December 31

 

Assets                                                                   2011                                                                       2010

Cash                                                                      $ 73,000                                                          $ 22,000

Accounts receivable                                              85,000                                                              76,000

Inventories                                                            170,000                                                             189,000

Land                                                                         75,000                                                            100,000

Equipment                                                            260,000                                                             200,000

Accumulated depreciation                                (66,000)                                                              (32,000)

Total                                                  $597,000                                                              $555,000

Liabilities and Stockholders’ Equity

Accounts payable                                            $ 39,000                                                                $ 47,000

Bonds payable                                                   150,000                                                                 200,000

Common stock ($1 par)                                                  216,000                                                                 174,000

Retained earnings                                            192,000                                                                 134,000

Total                                                      $597,000                                                              $555,000

 

Additional information:

1. Net income for 2011 was $103,000.

2. Cash dividends of $45,000 were declared and paid.

3. Bonds payable amounting to $50,000 were redeemed for cash $50,000.

4. Common stock was issued for $42,000 cash.

5. No equipment was sold during 2011, but land was sold at cost.

 

Instructions for Exercise 14:

 

(A) Prepare a horizontal analysis of the balance sheet data for Conard Corporation using 2011 as a base.

(B) Prepare a vertical analysis of the balance sheet data for Conard Corporation in columnar form for 2012.

 

14)    The comparative condensed balance sheets of Conard Corporation are presented below.

 

CONARD CORPORATION

Comparative Condensed Balance Sheets

December 31

2012                                                       2011

Assets

Current assets                                                                                   $ 74,000                                                $ 80,000

Property, plant, and equipment (net)                                               99,000                                                    90,000

Intangibles                                                                                              27,000                                                  40,000

Total assets                                                                        $200,000                                              $210,000

Liabilities and stockholders’ equity

Current liabilities                                                                               $ 42,000                                             $ 48,000

Long-term liabilities                                                                          143,000                                                150,000

Stockholders’ equity                                                                            15,000                                                  12,000

Total liabilities and stockholders’ equity                       $200,000                                           $210,000

 

 

Section 2

 

Write a 400-word response regarding the differences between the direct and indirect presentation of cash flows. Why does the Financial Accounting Standards Board allow both methods? Which do you prefer? Why?

 

 

 

*****Response must be consistent with APA guidelines complete with in-text citations as well as reference page. *****