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  • Mountain Company CFS Problem

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    Bryan Nogra
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    Mountain Company provided its balance sheet and income statement for 2014 and 2013. Key figures include cash and equivalents decreasing from $7.4 million to $5.6 million, inventory increasing from $6.5 million to $8 million, and property, plant and equipment increasing from $42 million to $55 million with accumulated depreciation also rising. Accounts payable decreased from $9.5 million to $6 million while long-term debt to the bank increased from $0 to $10 million. Retained earnings improved from a $1 million loss to a $2.5 million balance. Cash was raised through long-term borrowing and equipment was sold for $1.8 million. A $3 million cash dividend

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    Mountain-Company-CFS-problem

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    Mountain Company provided its balance sheet and income statement for 2014 and 2013. Key figures include cash and equivalents decreasing from $7.4 million to $5.6 million, inventory increasing from $6.5 million to $8 million, and property, plant and equipment increasing from $42 million to $55 million with accumulated depreciation also rising. Accounts payable decreased from $9.5 million to $6 million while long-term debt to the bank increased from $0 to $10 million. Retained earnings improved from a $1 million loss to a $2.5 million balance. Cash was raised through long-term borrowing and equipment was sold for $1.8 million. A $3 million cash dividend

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    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
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    18 views1 page

    Mountain Company CFS Problem

    Uploaded by

    Bryan Nogra
    Mountain Company provided its balance sheet and income statement for 2014 and 2013. Key figures include cash and equivalents decreasing from $7.4 million to $5.6 million, inventory increasing from $6.5 million to $8 million, and property, plant and equipment increasing from $42 million to $55 million with accumulated depreciation also rising. Accounts payable decreased from $9.5 million to $6 million while long-term debt to the bank increased from $0 to $10 million. Retained earnings improved from a $1 million loss to a $2.5 million balance. Cash was raised through long-term borrowing and equipment was sold for $1.8 million. A $3 million cash dividend

    Copyright:

    © All Rights Reserved
    Download as DOCX, PDF, TXT or read online from Scribd
    Flag for inappropriate content
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    Mountain Company provided the following information:

    2014 2013
    Cash and cash equivalents 5,600,000 7,400,000
    Accounts receivable 3,000,000 3,500,000
    Inventory 8,000,000 6,500,000
    Prepaid expenses 400,000 600,000

    Property, plant and equipment 55,000,000 42,000,000


    Accumulated depreciation (20,000,000) (16,000,000)

    Accounts payable 6,000,000 9,500,000


    Accrued expenses 1,500,000 500,000

    Note payable - bank (current) 2,000,000 5,000,000


    Note payable-bank (noncurrent) 10,000,000 -

    Ordinary share capital 30,000,000 30,000,000


    Retained earnings 2,500,000 ( 1,000,000)

    Cash needed to purchase new equipment was raised by borrowing from the bank with a
    long-term note.

    Equipment costing P2,000,000 and carrying amount of PI,500,000 was sold for PI,800,000.

    The entity paid a cash dividend of P3,000,000 in 2014.

    Retained Earnings
    Beg
    Net loss Net Income
    Cash Dividend
    End

    Retained Earnings
    1,000,000
    6,500,000 net income
    3,000,000
    2,500,000

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