Shamrock Company had the following information available at the end of 2014.
Please take a look at the question below and create a statement of cash flows AND a reconciliation schedule.
Prepare a statement of cash flows for Shamrock Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
COMPARATIVE BALANCE SHEETS
AS OF DECEMBER 31, 2014 AND 2013
2014 2013
Cash
$10,760 $3,060
Accounts receivable
20,590 13,800
Short-term investments
21,640 31,330
Inventory
41,100 36,080
Prepaid rent
2,400 13,480
Prepaid insurance
2,610 970
Supplies
1,350 830
Land
124,930 172,200
Buildings
350,040 350,040
Accumulated depreciation—buildings
(105,220)(88,110)
Equipment
524,620 400,050
Accumulated depreciation—equipment
(130,660) (113,950)
Patents
45,840 51,350
Total assets
$910,000 $871,130
Accounts payable
$22,380 $31,070
Income taxes payable
5,390 4,960
Salaries and wages payable
6,000 3,840
Short-term notes payable
10,530 10,530
Long-term notes payable
60,590 70,170
Bonds payable
400,170 400,170
Premium on bonds payable
14,314 23,820
Common stock
240,840 219,100
Paid-in capital in excess of par—common stock
25,576 17,790
Retained earnings
124,210 89,680
Total liabilities and stockholders’ equity
$910,000 $871,130
Shamrock's COMPANY
INCOME STATEMENT AND DIVIDEND INFORMATION
FOR THE YEAR ENDED DECEMBER 31, 2014
Sales revenue
$1,160,450
Cost of goods sold
748,980 411,470
Gross margin
Operating expenses
Selling expenses
$79,520
Administrative expenses
156,790
Depreciation/Amortization expense
39,330
Total operating expenses
275,640
Income from operations
135,830
Other revenues/expenses
Gain on sale of land
8,320
Gain on sale of short-term investment
4,390
Dividend revenue
2,500
Interest expense
(52,270)
(37,060)
Income before taxes
98,770
Income tax expense
40,350
Net income
58,420
Dividends to common stockholders
(23,890)
To retained earnings
$34,530