Question 4) W. Karim is the bookkeeper for Work Done Wrong (wDw) Company. W. Kar

Question

Question 4) W. Karim is the bookkeeper for Work Done Wrong (wDw) Company. W. Karim has been trying to get the balance sheet of WDW Company to balance, but due to his very poor accounting ski he can't do it. Prepare a corrected Balance Sheet (in color) for W. Karim. Prepare this as shown in class on your PowerPoint presentation (in good form). Note: WDW Company had Cash, but you will need to determine the number based on the information given. lls WDW Company Balance Sheet September 30, 2018 ASSETS LIABILITIES S 1,800 1,400 18,300 3,200 ???? Wages Payable 11,800Supplies Expense Cash Cost of Goods Sold Utilities Expense Building Accounts Payable Dividends Supplies 900 Retained Earnings 32,600 Accounts Receivable 3,900 200 STOCKHOLDERS' EQUITY 700 Common Stock Sales Revenue Unearned Revenue 13,000 17,000 15,800 Total assets $ 22??? Total Liabilities and O.E Question 5) Below is selected financial information for Stu Corporation for December 31, 2018 Inventory Cash paid to suppliers Buildings Common Stock Cash dividends paid Cash paid to purchase land $ 88,400 171,700 323,000 112,200 10,200 111,900 Cash paid to purchase building Equipment Service revenue Cash received from customers Cash received from issuing bonds Cash at beginning of period $150,000 74,800 177,000 268,600 165,800 77,770 Instructions Determine which items should be included in a statement of cash flows and then prepare the statement for Stu Corporation Comment on the adequacy of net cash provided by operating activities to fund the company investing activities and dividend payments. a. b.

Explanation / Answer

Requirement 4 Step I Separate Items belonging to Income statement and Retained Earnings Revenue from Sales 17000 Cost of goods sold 11800 Supplies Expense 1400 Utilities Expense 900 Step II Now prepare Balance sheet Balance Sheet Assets Current Assets Cash 16300 Balancing figure Accounts receivable 3200 Supplies 700 Total of current assets 20200 Non-current Assets Buildings 32600 32600 Total of assets 52800 Current Liabilties Accounts payable 3900 Unearned revenue 15800 Wages Payable 1800 Total of current Liabilties 21500 Non-current Liabilities 0 Equity Common stock 13000 Retained earnings 18300 Total of equity 31300 Total of equity and liabilities 52800 Requirement 5-a The following items should included in the following cash flow statement Operating activities section Cash Received from customer 268600 Cash paid to suppliers -171700 Cash flows from operating activites 96900 Investment Activites section Cash paid to purchase land -111900 Cash paid to purchase building -150000 Cash flows from Investment activites -261900 Financing Activities section Cash received from issuing bonds 165800 Cash Dividends paid -10200 Cash flows from Financial activites 155600 Net Cash flows -9400 Cash at the beginning of the period 77700 Cash at the ending of the period 68300 Requirement 5-b Cash genered by operating activities are not sufficient to fund the investment of the company. It has resulted in borrowing by way of issuance of bonds. It seems that even dividend payment has also been made out of funds borrowed, if we assume that entire cash inflows of operating activites has been utilised in investment in land & Building.

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