ACCT460-1204A-01 Professional Accounting
Assignment Name:
Unit 2 Individual Project
Deliverable Length:
5001,000 words
Details:
The SCQ Corporation manufactures specialty medical tools ranging from $10,000 to$15,000 per unit. The tools are used in hospitals, clinics, and the home hospitality market. SCQ Corporation has contracted with YOUCPA to assist in creating its cash flow statement. In the past, its income statement and balance sheet have been prepared by the internal accountant.
It would like you to assist in preparing the cash flows using both the direct and indirect method. Sales and balance sheet information for the years 20092010 are below:
Balance Sheet
SCQ Corporation
For period ending 12/31/2010
Assets
2010
2009
Liabilities
2010
2009
Cash
150
100
Account receivable
600
400
Accounts payable
400
300
Inventory
750
500
Accrued taxes payable
200
100
Current assets
1,500
1,000
Current liabilities
600
400
Land
50
50
Equipment
1,300
1,200
Note payable
330
300
Less: Acc. depreciation
700
600
Deferred taxes
35
20
Net fixed assets
600
600
Equity:
Total fixed assets
650
650
Common stock
640
500
Paid-in capital
80
80
Retain earnings
465
350
Total equity
1,185
930
Total assets
2,150
1,650
Total equity and liabilities
2,150
1,650
Income Statement
SCQ Corporation
For period ending 12/31/ 2010
Items
2010
2009
Revenue
1,000
900
Cost of goods sold
400
350
Gross profit
600
550
Wages expense
110
100
Interest expense
50
40
Depreciation expense
100
90
Insurance expense
50
50
Other misc. expenses
90
80
Total expenses
400
360
Operating income
200
190
Taxes:
Deferred taxes
15
20
Taxes expense
70
67
Net income after taxes
115
103
Additions to retains earnings
115
103
The information below can be used to complete the direct method of cash flow:
Cash flows from operating activities
2010
Cash receipts
Received from sales of goods
930
Paid for inventory
400
Paid for employees
110
Paid for interest
50
Paid for taxes
70
Paid for other expenses
320
Cash paid for equipment
100
Cash received for common stock
120
Cash received from note payable
30
Assignment Guidelines:
Indirect method cash flow/cash flow statement:
What is the operational cash flow?
What is the investing cash flow?
What is the financing cash flow?
Direct method cash flow:
What is the operational cash flow?
What is the investing cash flow?
What is the financing cash flow?
What are the differences in the cash flow concepts and procedures between the direct and indirect methods?
Please submit your assignment.
Grading Criteria
33%
11% What is the indirect operational cash flow?
11% What is the indirect investing cash flow?
11% What is the indirect financing cash flow?
33%
11% What is the direct operational cash flow?
11% What is the direct investing cash flow?
11% What is the direct financing cash flow?
34%
What are the differences in the cash flow concepts and procedures between the direct and indirect methods?
Objective:
? Develop a thorough understanding of accounting standards and principles.
? Fulfill the core accounting educational requirement to sit for the CPA exam.
? Prepare to practice in public and private accounting position.
? Advance to a higher professional level.