The SCQ Corporation manufactures specialty medical tools ranging from $10,000 to$15,000 per unit. The tools are used in hospitals, clinics, and the home hospitality market. SCQ Corporation has contracted with YOUCPA to assist in creating its cash flow sta

profilejudy1

 

NO PLAGIARISM

Delivery: 500 -1,000 words 

SCQ Corporation has contracted with YOUCPA to assist in creating its cash flow statement. In the past, its income statement and balance sheet have been prepared by the internal accountant.

It would like you to assist in preparing the cash flows using both the direct and indirect method. Sales and balance sheet information for the years 2009–2010 are below:

Balance Sheet

SCQ Corporation

For period ending 12/31/2010

Assets

2010

2009

Liabilities

2010

2009

Cash

 150

 100

 

 

 

Account receivable

 600

 400

Accounts payable

400

300

Inventory

 750

 500

Accrued taxes payable

200

100

Current assets

1,500

1,000

Current liabilities

600

400

Land

    50

     50

 

 

 

Equipment

1,300

1,200

Note payable

330

300

Less: Acc. depreciation

 700

 600

Deferred taxes

 35

 20

Net fixed assets

 600

 600

Equity:

 

 

Total fixed assets

 650

 650

Common stock

 640

500

 

 

 

Paid-in capital

 80

 80

 

 

 

Retain earnings

 465

350

 

 

 

Total equity

1,185

930

Total assets

2,150

1,650

Total equity and liabilities

2,150

1,650

 

Income Statement

SCQ Corporation

For period ending 12/31/ 2010

 

 

 

Items

2010

2009

Revenue

1,000

900

Cost of goods sold

 400

350

Gross profit

 600

550

Wages expense

 110

100

Interest expense

   50

40

Depreciation expense

 100

90

Insurance expense

   50

50

Other misc. expenses

   90

80

Total expenses

 400

360

Operating income

 200

190

Taxes:

 

 

Deferred taxes

 15

20

Taxes expense

 70

67

Net income after taxes

115

103

Additions to retains earnings

115

103

The information below can be used to complete the direct method of cash flow:

Cash flows from operating activities

2010

Cash receipts

 

Received from sales of goods

930

Paid for inventory

   400

Paid for employees

   110

Paid for interest

     50

Paid for taxes

    70

Paid for other expenses

 320

Cash paid for equipment

100

Cash received for common stock

120

Cash received from note payable

 30

Assignment Guidelines:

  1. Indirect method cash flow/cash flow statement:
    1. What is the operational cash flow?
    2. What is the investing cash flow?
    3. What is the financing cash flow?
  2. Direct method cash flow:
    1. What is the operational cash flow?
    2. What is the investing cash flow?
    3. What is the financing cash flow?
  3. What are the differences in the cash flow concepts and procedures between the direct and indirect methods?
    • 5 years ago
    • 20
    Answer(1)

    Purchase the answer to view it

    NOT RATED
    • attachment
      scq_cash_flow_tutorial.docx
    • attachment
      scq_cash_flow_working.xlsx
    Bids(0)