ACCT460-1204A-01 Professional Accounting Assignment Name: Unit 2 Individual Project Deliverable Length: 500–1,000 words Details: The SCQ Corporation manufactures specialty medical tools ranging from...

ACCT460-1204A-01 Professional Accounting Assignment Name: Unit 2 Individual Project Deliverable Length: 500–1,000 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 2009–2010 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: A. Indirect method cash flow/cash flow statement: a. What is the operational cash flow? b. What is the investing cash flow? c. What is the financing cash flow? B. Direct method cash flow: a. What is the operational cash flow? b. What is the investing cash flow? c. What is the financing cash flow? C. 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.