Lander Inc. had the following balance sheet at December 31, 2014: Lander liquida
ID: 2415024 • Letter: L
Question
Lander Inc. had the following balance sheet at December 31, 2014: Lander liquidated its available-for-sale investment portfolio at a loss of $6,500. A tract of land was purchased for $31,000. An additional $20,000 in common stock was issued at par. Dividends totalling $5,000 were declared and paid to stockholders. Net income for 2015 was $29,000, including $7,000 in depreciation expense. Land was purchased through the issuance of $25,000 in additional bonds. At December 31, 2015, cash was $72,650, accounts receivable was $35,250, and accounts payable was $32,500. In an Excel spreadsheet: Prepare a statement of cash flows for the year 2015 for Lander. Prepare the balance sheet as it would appear as of December 31, 2015.Explanation / Answer
Cash flow statements
Cash flows from operating activities
Net income 22,000.00
Depriciation expense 7,000.00
increase in AR (16,350.00)
Decrease in AP 1,300.00
Total of operating activities 13,950.00
Cash flows from investing activities
Available for sale investment portfolio (6,500.00)
Purchase of land (31,000.00)
Total of investing activities (37,500.00)
Cash flows from Financing activities
Payment of dividends (5,000.00)
Payment of bonds 25,000.00
Issuance of common stock 20,000.00
Total of financing activities 40,000.00
Total of all activities 16,450.00
Cash at begning 45,300.00
Cash at end 61,750.00
Balance Sheet:
Assets Liabilities
Cash 72650 AP 32500
AR 35250 Bonds Payable 60000
Investments 18500 Common Stock 210000
Plant Assets 78000 Retained earnings 47400
Land 141000
Total 345400 Total 345400
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