Exercise 5-16 (Part Level Submission) A comparative balance sheet for Sweet Corp

Question

Exercise 5-16 (Part Level Submission) A comparative balance sheet for Sweet Corporation is presented below. December 31 Assets Cash Accounts receivable Inventory Land Equipment Accumulated Depreciation-Equipment 2017 2016 $72,700 $22,000 83,780 68,080 181,780 191,080 72,780 112,080 261,780 202,080 (70,780) (44,080) $602,040 $551,240 Total Liabilities and Stockholders Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings $ 35,780 49,080 150,000 200,000 214,000 164,000 202,260 138,160 $602,040 $551,240 Total Additional information: 1. Net income for 2017 was $128,560. No gains or losses were recorded in 2017. 2. Cash dividends of $64,460 were declared and paid. 3. Bonds payable amounting to $50,000 were retired through issuance of common stock nbte Reserved, A Pivision of

Explanation / Answer

Cash flow Statement: Cash flows from Ooperating activities: Net income for the year 128560 Adjustment required Depreciation 26700 Increase n Accounts receivable -15700 Decrease in Inventory 9300 Decrease in Accounts payable -13300 7000 Net cash provided from Operating activities 135560 Cash flows from Investing activities: Sale of land 39300 Purchase of equipment -59700 Net cash used from Investing activities -20400 Cash flows from financing activities Dividend paid -64460 Net cash used in financing activities -64460 Net Increase in cash 50700 Beginning balance of cash 22000 Ending balance of cash 72700

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