Note: Homework is graded on completion basis. Make sure you make a thorough effo

Question

Note: Homework is graded on completion basis. Make sure you make a thorough effort on each question to ensure full points are earned.

Note: Part 1 and Part 2 are not related problems.

Required: Prepare the balance sheet. Note: Ignore income taxes.

Note: Ending Retained Earnings is $410,000. I am providing this information to you so that you do not need to prepare an income statement and retained earnings statement.

1 Normal T No Spac.. Heading 1 H Paragraph Part 1 -Balance Sheet/ DebitCredit 197,000 435,000 Cash Accounts Receivable All owance for Doubtful Accounts Notes Receivable Supplies Inventory Debt Investments (trading) cost Equipment Accumulated Deperci BuildinR Accumulated Deperciation Buildi Land Franchises Patents De bt Investne nts tlong-term Equity Investments (long-term) Accounts Payable Salaries and Wages Payable Notes Payable (short-term) Dividends Payable Accrued Liabi lities Notes Payable (long-term) Bonds Payable Common Stock. Par S 5.00 APIC Treasury Stock Retained Earnings Cash Dividends Sales Revenut Sales Discounts Sales Returns and Allowances cOGS Purchase Diwounts Freight itn Selling Expenses Administr ati ve Experses Interest ExpensS Re nt Re venus Gairi 25,000 597,000 600,000 1, 040,000 ation Equi pment 60,000 152,000 260,00o 160,000 195,000 299,000 277,000 455,000 136,000 96,000 900,000 1, 0oo,oo0 1?000,000 80.000 191,000 78.000 8 100,000 2. 00o.000 soo.ooo 211,000 5 Invtenit Revenue 5 12. 315 00e 12.3us.oop Ch ????e

Explanation / Answer

Part 1)

The balance sheet is prepared as below:

____

Part 2)

The cash flow statement is given as below:

____

The value of free cash flow is arrived as below:

Free Cash Flow = Net Cash Provided by Operating Activities - Purchase of Equipment - Dividends = 137,000 - 17,000 - 133,000 = -$13,000

Balance Sheet Dec-31,XXXX Assets Current Assets: Cash 197,000 Accounts Receivable 435,000 Less Allowance for Doubtful Debts 25,000 410,000 Inventory 597,000 Debt Investments (Trading) 153,000 Total Current Assets 1,357,000 Long Term Investments: Debt Investment (Long Term) 299,000 Equity Investments (Long Term) 277,000 Total Long Term Investments 576,000 Property, Plant and Equipment: Land 260,000 Equipment 600,000 Less Accumulated Depreciation - Equipment 60,000 540,000 Building 1,040,000 Less Accumulated Depreciation - Building 152,000 888,000 Total Property, Plant and Equipment 1,688,000 Intangible Assets: Franchises 160,000 Patents 195,000 Total Intangible Assets 355,000 Total Assets $3,976,000 Liabilities and Stockholder's Equity Current Liabilities: Accounts Payable 455,000 Notes Payable 90,000 Dividends Payable 136,000 Accrued Liabilities 96,000 Total Current Liabilities 777,000 Long Term Debt: Notes Payable 900,000 Bonds Payable 1,000,000 Total Long Term Liabilities 1,900,000 Total Liabilities 2,677,000 Stockholder's Equity: Paid-in Capital Common Stock 1,000,000 Additional Paid-in Capital 80,000 1,080,000 Retained Earnings 410,000 Total Paid-in Capital and Retained Earnings 1,490,000 Less Treasury Stock 191,000 Total Stockholder's Equity 1,299,000 Total Liabilities and Stockholder's Equity $3,976,000

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