Swasey Company provided the following partial comparative balance sheets and the
ID: 2390787 • Letter: S
Question
Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2.
Swasey Company
Comparative Balance Sheets
At December 31, 20X1 and 20X2
1
20X1
20X2
2
Current assets:
3
Cash
$210,500.00
$645,500.00
4
Accounts receivable
$750,000.00
$583,000.00
5
Inventories
301,000.00
317,000.00
6
Long-term assets:
7
Plant and equipment
2,209,000.00
2,142,000.00
8
Accumulated depreciation
(1,193,000.00)
(1,257,000.00)
9
Land
998,000.00
1,444,500.00
10
Total assets
$3,275,500.00
$3,875,000.00
11
Current liabilities:
12
Wages payable
$699,000.00
$514,000.00
13
Long-term liabilities:
14
Bonds payable
0.00
387,000.00
15
Mortgage payable
104,500.00
0.00
16
Total liabilities
$803,500.00
$901,000.00
17
Stockholders’ equity:
18
Common stock
373,000.00
373,000.00
19
Paid-in capital in excess of par
275,000.00
275,000.00
20
Retained earnings
1,824,000.00
2,326,000.00
21
Total stockholders’ equity
2,472,000.00
2,974,000.00
22
Total liabilities and stockholders’ equity
$3,275,500.00
$3,875,000.00
Swasey Company
Income Statement
For the Year Ended December 31, 20X2
1
Revenues
$3,008,000.00
2
Gain on sale of equipment
104,000.00
3
Cost of goods sold
(1,915,000.00)
4
Depreciation expense
(272,000.00)
5
Interest expense
(13,000.00)
6
Net income
$912,000.00
During the year, Swasey Company sold equipment with a book value of $276,500 for $380,500 (original purchase cost of $484,500). New equipment was purchased.
Refer to the list below for the exact wording of a label or an amount description within your Statement of Cash Flows.
1. Prepare a statement of cash flows for Swasey for 20X2. (Note: Use a minus sign to indicate any decreases in cash or cash outflows. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.)
Swasey Company
Statement of Cash Flows
For the Year Ended December 31, 20X2
Add (deduct) adjusting items:
2. Complete the statement below regarding the relationship between the statement of cash flows and the change in cash.
The sum of the (operating and investing) or (operating,investing, and financing) or (investing and operating) or (operating and financing) cash flows must equal the change in (cash flow) or (net income) or (cash account).
.
Swasey Company
Comparative Balance Sheets
At December 31, 20X1 and 20X2
Explanation / Answer
Statement of cash flows Cash flows from Operating activities Net Income for the year 912000 Ajdustment Depreciation 272000 Gain on sale of equipment -104000 Decease in accounts receivable 167000 Increase in inventries -16000 Decrease in wages payable -185000 Net cash provided from operating 1046000 Cash flows form investing activities: sale of equipment 380500 Purchase of equipment (=2209000-484500-2142000) -417500 Purchase of land -446500 Net csh used in investing activities -483500 Cash flows from financing activities: Issue of bonds 387000 Mortgage repaid -104500 Dividend paid (1824000+912000-2326000) -410000 Net cash used n financing activities -127500 Net cash increase 435000 Add: Beginning balance 210500 Ending balance 645500 The Sum of Operating or investing or financing activities cash flows must equal the c hange n cash flows
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