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Refer to the financial statement information on the next two pages for Catalina, Inc, for fiscal year ended 12/31/2003. assume the following: Notes Payable are not related to amount owed to regular suppliers due to regular operations. Changes in Property, Plant, and Equipment accounts did involve cash. The only changes in accumulated depreciation were due to Depreciation Expense. Changes in Stockholders’ Equity accounts involved cash. The dividends were cash dividends declared and paid during the year.
Based upon this information, complete, in good form, the following for the 2003 fiscal year:
1. A schedule for the calculation of cash generated from operating activities under the direct method.
2. The complete Statement of Cash Flows by the direct method.
3. The Operating Activities section of the Statement of Cash Flows by the indirect method.
Catalina Inc.
Comparative Balance Sheet
December 31, 2003 and 2002
Assets 2003 2002
Current assets:
Cash $201,197 $212,000
Government Notes (cash equivalent) 5,700 20,000
Interest Receivable 385 700
Accounts receivable 535,800 506,000
Merchandise Inventory 613,394 675,120
Supplies and Prepayments 38,143 27,356
Total Current Assets $1,394,519 $1,441,176
Property, Plant and Equipment
Store Equipment $456,000 $388,000
Less Accum. Depr.-Store Equipment (171,000) (140,000)
Delivery Equipment 427,500 320,000
Less Accum. Depr.-Delivery Equip. (118,750) (80,000)
Office Equipment 361,000 339,900
Less Accum. Depr.-office Equip. (76,000) (61,000)
Total Property, Plant and Equip 878,750 766,900
Total Assets $2,273,269 2,208,076
LIABILITIES
Current Liabilities
Notes Payable $73,241 $118,000
Accounts Payable 230,153 384,470
Payroll Taxes Payable 9,300 15,200
Interest Payable 899 800
Total Liabilities $313,593 $518,470
STOCKHOLDER’S EUITY
Common Stock $990,000 $980,000
Paid – in-capital in excess of par-common st 390,500 390,000
Retained earnings 579,176 319,606
Total Stockholder’s Equity 1,959,676 $1,689,606
Total liabilities and Stockholder’s Equity $2,273,269 $2,208,076
Catalina, Inc.
Income Statement
For the Year Ended December 31, 2003
Net Sales $2,687,750
Cost of Goods Sold (1,264,673)
Gross Profit 1,423,077
Operating expenses (1,035,528)
Operating Income 387,549
Other Revenues and Expenses
Interest Revenue $1,008
Interest Expense (4,187) (3,179)
Net Income $384,370
Catalina, Inc.
Statement of Retained Earnings
For the Year Ended December 31, 2003
Retained Earnings, January 1 $319,606
Net income $384,370
Less Dividends (124,800)
Net Increase in Retained Earnings $259,570
Retained Earnings, December 31 $579,176
 
 
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