The ending and beginning balances of Parma Corporation\'s balance sheet accounts
ID: 2381741 • Letter: T
Question
The ending and beginning balances of Parma Corporation's balance sheet accounts for the most recent year are listed below:
......................................................................Ending Balance.......Beginning Balance
Assests & Contra-Assets:
Cash and cash equivalents.....................................$51,000.................$32,000
Accounts receivable.............................................$23,000..................$20,000
Inventory...........................................................$62,000..................$59,000
Property, plant, and equipment.............................$422,000..................$398,000
Accumulated depreciation....................................$197,000..................$167,000
Liabilities and Stockholders' Equity:
Accounts payable...............................................$16,000...................$12,000
Accrued liabilities...............................................$33,000....................$29,000
Income taxes payable.........................................$62,000....................$58,000
Bonds payable...................................................$109,000..................$100,000
Common stock...................................................$25,000...................$23,000
Retained earnings..............................................$116,000.................$120,000
The company's net income (loss) for the year was $0 and its cash dicidends were $4,000. It did not dispose of any propery, plant, and equipment, retire any bonds payable, or repurchase any of its own common stock during the year.
Required:
Compute the change in each noncash balance sheet account. Indicate whether the change in each balance will be recorded in the operating, investing, or financing activities section of the statement of cash flows. For items recorded in the operating activites section, also indicate whether the change will be added to or subtracted from net inocme. For all other items, indicate whether the change will be added as a cash inflow or subtracted a a cash outflow.
Explanation / Answer
Hi,
Please find the answer as follows:
Thanks.
Ending Balance Opening Balance Change Relevant
Section
Accounts Receivable 23000 20000 3000 Operating Will be Subtracted Inventory 62000 59000 3000 Operating Will be Subtracted Property, Plant, and Equipment 422000 398000 24000 Investing Will be Subtracted Accumulated Depreciation 197000 167000 30000 Operating Will be Added
Accounts Payable 16000 12000 4000 Operating Will be Added Accrued Liabilities 33000 29000 4000 Operating Will be Added Income Taxes Payable 62000 58000 4000 Operating Will be Added Bonds Payable 109000 100000 9000 Financing Will be Added Common Stock 25000 23000 2000 Financing Will be Added Retained Earnings 116000 120000 -4000 Financing Will be Subtracted
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