Question 1
The income statement, comparative balance sheet, and additional information for LACONIC Corporation for 2015 appear below:
Income Statement
Revenues:
Sales $23,598
Gain on sale of equipment 205 $23,803
Expenses:
CGS 11,456
Salary and wages expense 4,123
Depreciation 1,052
Other operating expenses 3,577 20,208
Operating income (EBIT) 3,595
Interest expense on bonds 246
Income before tax 3,349
Income tax 1,139
Net income $ 2,210
Comparative Balance Sheet
2015 2014
Cash $ 1,011 $ 1,163
A/R 1,012 957
Inv 3,984 3,277
Prepaid expenses 155 178
Land 510 510
Buildings 3,680 3,680
Equipment 8,798 8,555
Accumulated depreciation (3,443) (2,891)
Totals $15,707 $15,429
A/P $ 3,588 $ 3,325
Salary and Wages payable 85 75
Interest payable 62 74
Income tax payable 55 50
Other accrued liabilities 1,126 1,104
Long-term debt 3,075 3,575
Common stock 3,750 4,350
R/E 3,966 2,876
Totals $15,707 $15,429
Other data:
During 2015, LACONIC purchased new equipment for a total of $1,300. No items affected retained earnings other than net income and dividends
Required:
1. Prepare CFS using the INDIRECT methods.
2. Prepare CFS using the indirect method.
3. Compute