Required Informatlon Use the following Information for the Problems below. Forte

Question

Required Informatlon Use the following Information for the Problems below. Forten sales, (2) all credits to Accounts Recelvable reflect cash recelpts from customers, (3) all purchases of Inventory are on credit.(4) all deblts to Accounts Payable reflect cash payments for Inventory, and (5) Other Expenses are paid In advance and are Initially debited to Prepald Expenses. The company's Income statement and balance sheets follow a merchandiser, recently completed its calendar-year 2017 operations. For the year, (0 all sales are credlt eive Balance Sheets 31 2017 and 2016 $60,400 80,500 57.625 286,156 258,800 76, 340 1,280 150, 500 Accounes recelvable Prepaid Total current assets 398,960 115,000 Accun. depreciatton-Equipmene Total assets Liabilftles and Equity $464,460 $ 60,141 $125.175 2,575 188,325 176,750157,250 Short-term notes payable Total c Long-term notes payable 12,100 61,500 133,74 Common stock, $5 par value 44,500 Total liabilitles and equity $534,551 $464.460 Incone Statenent Cost of goods sold $617,500 325,500

Explanation / Answer

Cash flow indirect method Cash flow from operating activities Net income 112175 Adjustments to reconcile the net income Loss on sale of equipment 12125 Depreciation expense 27750 Changes in current asset and liabilities Increase in accounts receivable -18715 Increase in inventory -27356 Decrease in prepaid expense 755 decrease in accounts payable -65034 Increase in notes payable short term 4700 -65775 Cash flow from operating activities 46400 Cash flow from Investing activities Equipment purchased -44000 Equipment sold 18625 Cash flow from Investing activities -25375 Cash flow from Financing activities Paid in capital in excess 44500 Common stock 19500 Dividend -51500 Long term notes paid -53625 Cash flow from Financing activities -41125 Net Cash and cash equivalent -20100 Add Beginning cash and cash equivalent 80500 Ending cash and cash equivalent 60400

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