Condensed financial data of Gorni Company appear below: Additional information:
1) New plant assets costing $85,000 were purchased for cash in 2014.
2) Old plant assets costing $25,000 were sold for $5,000 cash when book value was $13,000.
3) Bonds with a face value of $20,000 were converted into $20,000 of common stock.
4) A cash dividend of $24,000 was declared and paid during the year.
5) Accounts payable pertain to merchandise purchases.
Instructions
1) Prepare a statement of cash flows for the year using the direct method.
2) Compute the following cash basis ratios:

Question

Condensed financial data of Gorni Company appear below:  Additional information:
1) New plant assets costing $85,000 were purchased for cash in 2014.
2) Old plant assets costing $25,000 were sold for $5,000 cash when book value was $13,000.
3) Bonds with a face value of $20,000 were converted into $20,000 of common stock.
4) A cash dividend of $24,000 was declared and paid during the year.
5) Accounts payable pertain to merchandise purchases.
Instructions
1) Prepare a statement of cash flows for the year using the direct method.
2) Compute the following cash basis ratios:

Quizplus · Accepted Answer

The Answer of Condensed financial data of Gorni Company appear below:  Additional information:
1) New plant assets costing $85,000 were purchased for cash in 2014.
2) Old plant assets costing $25,000 were sold for $5,000 cash when book value was $13,000.
3) Bonds with a face value of $20,000 were converted into $20,000 of common stock.
4) A cash dividend of $24,000 was declared and paid during the year.
5) Accounts payable pertain to merchandise purchases.
Instructions
1) Prepare a statement of cash flows for the year using the direct method.
2) Compute the following cash basis ratios:

Condensed Financial Data of Gorni Company Appear Below: Additional