(The - that are on the left hand side and $ on the right are representative of b
ID: 2435570 • Letter: #
Question
(The - that are on the left hand side and $ on the right are representative of blank boxes to be filled.)
The comparative balance sheets for Ramirez Company as of December 31 are presented below.
RAMIREZ COMPANY
Comparative Balance Sheets
December 31
Assets 2008 2007
Cash $ 71,000 $ 45,000
Accounts receivable 44,000 62,000
Inventory 151,450 142,000
Prepaid expenses 15,280 21,000
Land 105,000 130,000
Equipment 228,000 155,000
Acc. depr. - equipment (45,000) (35,000)
Building 200,000 200,000
Acc. depr. - building (60,000) (40,000)
Total $709,730 $680,000
Liabilities and Stockholders' Equity
Accounts payable $47,730 $ 40,000
Bonds payable 260,000 300,000
Common stock, $1 par 200,000 160,000
Retained earnings 202,000 180,000
Total $709,730 $680,000
Additional information:
1. Operating expenses include depreciation expense of $42,000 and charges from prepaid expenses of $5,720.
2. Land was sold for cash at book value.
3. Cash dividends of $15,000 were paid.
4. Net income for 2008 was $37,000.
5. Equipment was purchased for $95,000 cash. In addition, equipment costing $22,000 with a book value of $10,000 was sold for $6,000 cash.
6. Bonds were converted at face value by issuing 40,000 shares of $1 par value common stock.
Prepare a statement of cash flows for the year ended December 31, 2008, using the indirect method. (List multiple entries with a positive cash flow first and then the negative cash flow. List amounts from largest to smallest eg 10, 5, 3, 2. If amount decreases cash flow, use either a negative sign preceding the number eg -45 or parentheses eg (45).)
RAMIREZ COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2008
Cash flows from operating activities
- $
Adjustments to reconcile net income to net
cash provided by operating activities
- $
- $
- $
- $
- $
- $ $
Net cash provided by operating activities $
Cash flows from investing activities
- $
- $
- $
Net cash used by investing activities $
Cash flows from financing activities
- $
Net cash used by financing activities $
Net _______________ in cash $
Cash at beginning of period $
Cash at end of period $
Noncash investing and financing activities
- $
Explanation / Answer
Cash flows from operating activities
----------------------------------------------------
Net Income $37,000
Adjustments to reconcile net income to net
cash provided by operating activities
---------------------------------------------------------------
Depreciation $42,000
Prepaid expenses $5,720
Loss on sale of equipments $4,000
Decrease in accounts receivables $18,000
Increase in inventory $9,450
Increase in accounts payables ($7,730) $68,000
Net cash provided by operating activities $105,000
Cash flows from investing activities
---------------------------------------------------
Proceeds from sale of land $25,000
Purchase of equipments ($95,000)
Proceeds from sale of equipments $6,000
Net cash used by investing activities ($64,000)
$41,000
Cash flows from financing activities
---------------------------------------------------
Dividend payments ($15,000)
Net cash used by financing activities $15,000
Net increase in cash $26,000
Cash at beginning of period $45,000
Cash at end of period $71,000
=======
Noncash investing and financing activities
------------------------------------------------------------
Conversion of bonds into common stock $40,000
_____________________________________________________
Note : Set the figures according to the instructions given in the question viz.
(List multiple entries with a positive cash flow first and then the negative cash flow. List amounts from largest to smallest eg 10, 5, 3, 2. If amount decreases cash flow, use either a negative sign preceding the number eg -45 or parentheses eg (45).)
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