Lander Inc. had the following balance sheet at December 31, 2014: During 2015, t
ID: 2427109 • Letter: L
Question
Lander Inc. had the following balance sheet at December 31, 2014: During 2015, the following events occurred: 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 totaling $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
Lander Inc. (All amounts in $) Cash Flows for 2015 Cash Flows from Operating Activities Net Income for the year 29000 Add : Depreciation Expense 7000 Add : Dividends paid 5000 Add : Loss on Investment Sale 6500 18500 Cash Flow before Working Capital changes 47500 Less : Increase in Accounts Receivable -16350 Less : Decrease in Accounts Payable -1300 -17650 Cash Inflow from Operating Activities 29850 Cash Flows from Investing Activities Sale of Investments 18500 Purchase of Land -31000 -12500 Cash Flows from Financing Activities Common Stock issued 20000 Bonds repaid -35000 Bonds issued 25000 10000 Net Increase in Cash/Cash Equivalents 27350 Cash/Cash Equivalents as on 1 January 2015 45300 Cash/Cash Equivalents as on 31 December 2015 72650 Balance Sheet as on 31 December 2015 Cash 72650 Accounts Payable 32500 Accounts Receivable 35250 Bonds Payable 25000 Plant Assets (Net) 71000 Common Stock 210000 Land 141000 Retained Earnings 52400 Total Assets 319900 Total Liabilities and Equity 319900
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