(Surmise Company) The comparative balance sheets for 2011 and 2010 are given below for Surmise Company

P 21-14 Statement of cash flows; indirect method; limited information

The comparative balance sheets for 2011 and 2010 are given below for Surmise Company. Net income for 2011 was $50 million.

Surmise Company
Comparative Balance sheets
December 31, 2011 and 2010
($In millions)
2011 2010
Assets
Cash $45 $40
Accounts receivable 92 96
Less: Allowance for uncollectible accounts (12) (4)
Prepaid expense 8 5
Inventory 145 130
Long-term investment 80 40
Land 100 100
Buildings and equipment 411 300
Less: Accumulated depreciation (142) (120)
Patent 16 17
$743 $604
Liabilities
Account payable $17 $32
Accrued liabilities (2) 10
Notes payable 35 0
Lease liability 111 0
Bonds payable 65 125
Shareholder’s equity
Common Stock 60 50
Paid-in capital-excess of par 245 205
Retained earnings 212 182
$743 $604

Required:
Prepare the statement of cash flows of Surmise Company for the year ended December 31, 2011. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for change in some account balances. A spreadsheet or T-account analysis will be helpful.

Click here for the solution: The comparative balance sheets for 2011 and 2010 are given below for Surmise Company

The comparative balance sheets for 2006 and 2005 are given below for Surmise Company

The comparative balance sheets for 2006 and 2005 are given below for Surmise Company. Net Income for 2006 was $50 million.

Surmise Company Comparative Balance Sheets Dec. 31, 2006 and 2005 ($ in millions)
------------------------2006---------------------2005--------
ASSETS:
Cash $45 $40
Accounts Receivable 92 96
Less: Allowance for Uncollectible accounts (12) (4)
Prepaid expense 8 5
Inventory 145 130
Long term Investment 80 40
Land 100 100
Buildings & Equipments 411 300
less: Accumulated Depreciation (142) (120)
Patent 16 17
Total $743 $604
LIABILITIES:
Accounts Payable $17 $32
Accrued Liabilities (2) 10
Notes payable 35 0
Lease Liability 111 0
Bonds Payable 65 125
SHAREHOLDER"S EQUITY:
Common Stock $60 $50
Paid in Capital - Excess of par 245 205
Retained Earnings 212 182
Total $743 $604

REQUIRED: Prepare the statement of cash flow of Surmise Company for the year ended December 31, 2006. Use the indirect method to present cash flows from operating activities because you do not have sufficient information to use the direct method. You will need to make reasonable assumptions concerning the reasons for changes in some account balances. A spreadsheet or T-account analysis will be helpful.

Click here for the solution: The comparative balance sheets for 2006 and 2005 are given below for Surmise Company