Thomsen Incorporated

Input Area:
All sales are on credit
Fixed assets costing $ 5,000 , a book value $ 2,000
Were sold for $ 4,000

Long-Term Investments costing $ 5,000

was used to payoff $ 5,000 of bonds outstanding
Other expenses and losses consist of interest paid $ 1,000
Comparative balance sheets for 2023 And 2024 are as follows
All accounts payable is for inventory
All dividends are declared and paid

Thomsen Incorporated
Balance Sheet
December 31, 2024

2024 2023 Net Change

Cash $ 9,000 $ 8,500 $ 500
Treasury Bills (Cash Equivalent) 4,000 2,500 1,500
Accounts receivable 4,000 5,600 (1,600) (A)
Inventory 1,000 1,400 (400) (B)
Prepaid insurance 2,000 3,000 (1,000) (C)
Long-Term investment in ABC Co. 17,000 22,000 (5,000)
Equipment 22,000 17,000 5,000
Accumulated depreciation (5,000) (4,000) (1,000)
Total Assets $ 54,000 $ 56,000 $ (2,000)

Accounts payable $ 4,000 $ 7,000 $ (3,000) (D)

Income tax payable 3,000 1,000 2,000 (E)
Unearned revenue 5,000 3,000 2,000 (F)
Bonds payable 5,000 10,000 (5,000)
Common stock 20,000 20,000 -
Retained earnings 17,000 15,000 2,000
Total Liabilities and Stockholder's Equity $ 54,000 $ 56,000 $ (2,000)

Thomsen Incorporated
Income Statement
For the Year Ended December 31, 2024

Net sales $ 50,000

Cost of goods sold (20,000)
Gross profit 30,000
Operating expenses (17,000)
Incomes from operations 13,000
Other revenue and gains 2,000
Other expenses and losses (1,000)
Income before taxes 14,000
Income tax expense
Current portion $ 5,000
Deferred portion 2,000 7,000
Net income $ 7,000

Impact Area:
Indirect Approach

Net income $ 7,000

Decrease in account receivables 1,600 (A)
Decrease in inventory 400 (B)
Decrease in prepaid 1,000 (C)
Decrease in accounts payable (3,000) (D)
Increase in income tax payable 2,000 (E)
Increase in unearned revenue 2,000 (F)
Gain on sale of equipment (2,000) g
Depreciation expense 4,000 h
Net cash flows from operating activities $ 13,000

Direct Approach
Cash flows from operating activities:
Cash received from customers $ 51,600 a
Cash provided by operating activities $ 51,600
Cash paid to suppliers 22,600 b
Cash paid for operating expenses 12,000 c
Cash paid interest 1,000 given
Cash paid for income tax 3,000 d
Cash disbursed for operating activities 38,600
Net cash flows from operating activities 13,000
Cash flows from investing activities:
Proceeds from sale of fixed assets 4,000
Acquisition of fixed assets (10,000)
Net cash flows used by investing activities (6,000)
Cash flows from financing activities:
Dividend paid (5,000)
Net cash used by financing activities (5,000)
Net increase in cash and cash equivalents 2,000
Cash and cash equivalents at beginning of year 11,000
Cash and cash equivalents at end of year $ 13,000

Schedule of noncash investing and financing activities: Correct

Long-Term investments costing used to retire bonds payable $ 5,000

Created by Raine Smith

4/20/2023 0:27
C:\Users\raine\Desktop\Seton Hill\Semester 4 - Spring 2022\Financial Statement Analysis\[Raine S. - Excel 4.xlsx]Thomsen

Supporting Calculations

Income Taxes Payable

$ 1,000 B.B
5,000 Current Payable
d Income Taxes Paid $ 3,000
 $ 3,000 E.B.

Sales $ 50,000
Plus Beginning A/R 5,600
Minus Ending A/R 4,000
Cash inflows from Customers $ 51,600 a

Cost of Goods Sold 20,000 Cost of Goods Sold = BI + Purchases - End. Inv.
Minus Beginning inventory 1,400 Cost of Goods Sold - BI + EI = Purchases
Plus Ending inventory 1,000
Purchases 19,600
Plus Beginning A/P 7,000
Minus Ending A/P 4,000
Cash for inventory $ 22,600 b

Accounts Receivable
B.B $ 5,600
Credit Sales 50,000
$ 51,600 Cash Payments
E.B. $ 4,000

Inventory
Beginning balance $ 1,400
$ 20,000 C. of G. S.
Purchases 19,600
Ending Balance $ 1,000

Accounts Payable
$ 7,000 B.B.
19,600 Purchases
b Cash Paid to Suppliers $ 22,600
$ 4,000 E.B.

Prepaid Insurance
 B.B $ 3,000
$ 1,000 ins. Exp.
E.B. $ 2,000

Cost - Book Value = Accumulated Depreciation

$ 5,000 - $ 2,000 = $ 3,000

Accumulated Depreciation
$ 4,000 B.B
Sale of Fixed Asset 3,000
4,000 Depreciation Expense h
$ 5,000 E.B.

Plant and Equipment

B.B $ 17,000
$ 5,000 Sold Asset
New Assets 10,000
E.B. $ 22,000

Cash $ 4,000
Accumulated Depreciation 3,000
Fixed Asset $ 5,000
Gain on Sale 2,000 g

Operating Expenses $ 17,000

Minus Non Cash Expenses
Insurance Expense (1,000)
Depreciation Expense (4,000)
Cash Expenses $ 12,000 c

Retained Earnings
$ 15,000 B.B.
7,000 Net Income
Dividends $ 5,000
$ 17,000 E.B.