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Aero Inc. had the following balance sheet at December 31, 2013. AERO INC. BALANC

ID: 2423642 • Letter: A

Question

Aero Inc. had the following balance sheet at December 31, 2013. AERO INC. BALANCE SHEET DECEMBER 31, 2013 Cash $ 22,320 Accounts payable $ 32,320 Accounts receivable 23,520 Bonds payable 43,320 Investments 32,000 Common stock 102,320 Plant assets (net) 83,320 Retained earnings 25,520 Land 42,320 $203,480 $203,480 During 2014, the following occurred. 1. Aero liquidated its available-for-sale investment portfolio at a loss of $7,320. 2. A tract of land was purchased for $40,320. 3. An additional $30,000 in common stock was issued at par. 4. Dividends totaling $12,320 were declared and paid to stockholders. 5. Net income for 2014 was $37,320, including $14,320 in depreciation expense. 6. Land was purchased through the issuance of $32,320 in additional bonds. 7. At December 31, 2014, Cash was $72,520, Accounts Receivable was $44,320, and Accounts Payable was $42,320. Collapse question part (a) Prepare a statement of cash flows for the year 2014 for Aero. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Explanation / Answer

CASH FLOW FOR THE YEAR 2014:

S. No. Trasacntion Effect Cash in $ 1. Investments sold at loss of $ 7,320 $ 32000 - $ 7320 24, 680 2. Land Purchases decrease the cash    (40320) 3. Additional common stock issued increase the cash 30000 4. Dividends Paid decrease the cash (12320) 5. Net Income less Deprecation Increase cash both Net Income and Depreciation 51640 6 Land trough bonds Cash Not Change - 7. Increase in Account Payable Increase the Cash 10000 8. Increase in Account Receivable Decrease the cash (20800) 9 Decrease the net earnings to the extent of loss on sale of investments    7320 Total Cash Change
(      ) indcicates cash decrease else cash increses 50,200 Add: Cash Balance at beginning 22320 Cash Balance at the closing day of the year 2014 72,520

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Aero Inc. had the following balance sheet at December 31, 2013. AERO INC. Balanc

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