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Excel #5

ACCT 20100 Spring 2011

Statement of Cash Flows

Mike Company has the following Income Statement, Statement of Retained Earnings and Comparative Balance Sheets.

|Mike Company |

|Income Statement |

|For the Year Ended December 31, 2010 |

| | | |

|Sales | $ 5,000,000 | |

|Less: Cost of Goods Sold | $ 2,400,000 | |

|Gross Profit | | $ 2,600,000 |

|Less: Operating Expenses | | |

| Salaries Expense | $ 850,000 | |

| Wages Expense | $ 450,000 | |

| Commissions Expense | $ 200,000 | |

| Depreciation Expense | $ 40,000 | |

| Supplies Expense | $ 20,000 | |

| Other Operating Expenses | $ 675,000 | |

|Operating Income | | $ 365,000 |

|Other Revenue and Expense | | |

| Dividend Revenue | $ 85,000 | |

| Interest Expense | $ 120,000) | |

|Pre-tax Income | | $ 330,000 |

| Less: Income Taxes (20%) | | $ 66,000 |

|Net Income | | $ 264,000 |

|Mike Company |

|Statement of Retained Earnings |

|For the Year Ended December 31, 2010 |

| | |

|Retained Earnings | |

| Beginning Balance | $ 1,852,000 |

| Plus: Net Income | $ 264,000 |

| Less: Dividends Declared (and paid) | $ (50,000) |

| Ending Balance | $ 2,066,000 |

|Mike Company |

|Comparative Balance Sheet |

|As of December 31, |

| |2010 |2009 |

|ASSETS | | |

| Current Assets | | |

| Cash | $ 51,000 | $ 42,000 |

| Accounts Receivable | $ 453,000 | $ 475,000 |

| Merchandise Inventory | $ 1,303,000 | $ 1,200,000 |

| Supplies | $ 105,000 | $ 100,000 |

| Total Current Assets | $ 1,912,000 | $ 1,817,000 |

| Investments | $ 1,350,000 | $ 1,200,000 |

| Property, Plant & Equipment | | |

| Land | $ 300,000 | $ 450,000 |

| Equipment | $ 680,000 | $ 630,000 |

| Building | $ 1,850,000 | $ 1,400,000 |

| Accumulated Depreciation | $ (215,000) | $ (175,000) |

| Total Property, Plant & Equipment | $ 2,615,000 | $ 2,305,000 |

|TOTAL ASSETS | $ 5,877,000 | $ 5,322,000 |

| | | |

|LIABILITIES & STOCKHOLDERS' EQUITY | | |

| Current Liabilities | | |

| Accounts Payable | $ 309,000 | $ 325,000 |

| Salaries, Wages and Commissions Payable | $ 64,000 | $ 75,000 |

| Income Taxes Payable | $ 66,000 | $ 90,000 |

| Other Expenses Payable | $ 162,000 | $ 130,000 |

| Notes Payable | $ 250,000 | $ 200,000 |

| Total Current Liabilities | $ 851,000 | $ 820,000 |

| Bonds Payable | $ 2,000,000 | $ 2,000,000 |

| Stockholders' Equity | | |

| Common Stock, $1 par | $ 110,000 | $ 100,000 |

| Contributed Capital in Excess of Par | $ 1,500,000 | $ 1,200,000 |

| Treasury Stock | $ (650,000) | $ (650,000) |

| Retained Earnings | $ 2,066,000 | $ 1,852,000 |

| Total Stockholders' Equity | $ 3,026,000 | $ 2,502,000 |

|TOTAL LIABILITIES & STOCKHOLDERS' EQUITY | $ 5,877,000 | $ 5,322,000 |

ADDITIONAL INFORMATION that occurred during 2010:

1. Mike Company sold land for $150,000

2. Mike Company purchased Equipment for $50,000 cash.

3. Mike Company declared and paid a cash dividend of $50,000.

4. Mike Company received dividends from its investment of $85,000.

5. Mike Company purchased $150,000 of Teresa Company common stock.

6. Mike Company purchased a $450,000 building by issuing 5,000 shares of common stock with a market value of $125,000 and paid the remainder with cash.

7. Mike Company issued 5,000 shares of common stock with a market value of $37 per share.

8. Mike Company borrowed $50,000 in a short-term note from Bank of America.

9. The Accounts Payable account is exclusively used for transactions related to the purchase of inventory.

REQUIRED:

1. Determine the changes in the balance sheet accounts on the comparative balance sheet.

2. Prepare a Statement of Cash Flows using the indirect method of calculating the cash flows from operating activities.

3. Prepare a Statement of Cash Flows using the direct method of calculating the cash flows from operating activities.

Excel Rules:

1. You must use the Excel Templates provided on the ACCT 20100 website (). Note that each template is individualized for each student.

2. You must work individually on this assignment. Working with another student is a violation of the Notre Dame Honor code and will be enforced when discovered.

3. You must use links and formulas where ever possible. Failure to exploit Excel will result in a zero grade. There are only a couple of instances where typing numbers may be necessary.

4. You must sign your name to the honor code statement (the first sheet of the Excel template). Failure to sign your name (by typing your name) will result in a zero grade.

5. You must name your Excel file as: last name first name Excel 5. Failure to name your file in this exact syntax will result in a zero grade.

6. You need to upload your assignment to Concourse. No other means will be acceptable.

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