M November 23rd Assignme x c Dezto.mheducation.com/hm.tpx?-0.1 33647292407 13835

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M November 23rd Assignme x c Dezto.mheducation.com/hm.tpx?-0.1 33647292407 13835-1448766897 173 : Apps Bookmarks Corriente Saddle Co Sarah The following information applies to the questions displayed below.] Ravenna Company is a merchandiser that uses the Indirect method to prepare the operating activities section of its statement of cash flows. Its balance sheet for this year is as follows: Cash Accounts recelvable Inventory Ending Beginning Balance Balance $102.000 $. 122.400 81,700 88,000 109,700 100,000 293.400 310.400 Total current assets Property, plant, and equipment 291,000 280,000 Less accumulated depreclation Net property, plant, and equipment Total assets 97,000 70,000 194,000 210,000 $487.400 $.520.400 Accounts payable Income taxes payable Bonds payable Common stock Retalned earnings 64,000 113,700 49,700 65,700 20,000 100,000 140,000 120,000 113,700 121,000 Total liabilities and stockholders' equity $487,400 $.520.400 During the year, Ravenna pald a $12,000 cash dividend and It sold a plece of equipment for $6,000 that had originally cost $13,800 and had accumulated depreclation of $9,200. The company did not retire any bonds or repurchase any of its own common stock durlng the year 11/28/2015

Explanation / Answer

1. Adjustment Entries : (a) Retained Earnings $ 12000

Cash a/c $12000 (cash dividend paid)

(b) Cash A/c $6000

Accumulated Depreciation $9200

Equipment A/c $13800

Retained Earnings $ 1400 (profit booked on equipment sale)

2. There is a gain on the sale of equipments of $1400, that is to be adjusted to Retained Earnings by $1400.

3. Net Cash provided by - Accounts Receivables $ 6300

4. Gross Cash Outflow in Investing Activities: Property, Plant & Equipment by $38000 (-$6000 cash sale made)

Inventories - by $9700

5. Net Cash provided by -- Bonds Payable by $20000

Common Stock by $20000

  

PARTICULARS ENDING BALANCE ($) BEGINNING BALANCE($) CASH 102000 122400 ACCOUNTS RECEIVABLES 81700 88000 INVENTORIES 109700 100000 TOTAL CURRENT ASSETS 293400 310400 PROPERTY, PLANT AND EQUIPMENT 291000 280000 LESS: ACCUMULATIVE DEPRECIATION 97000 70000 NET PROPERTY, PLANT AND EQUIPMENT 194000 210000 TOTAL ASSETS 487400 520400 ACCOUNTS PAYABLE 64000 113700 INCOME TAXES PAYBALE 49700 65700 BONDS PAYABLE 120000 100000 COMMON STOCKS 140000 120000 RETAIN EARNINGS 113700 121000 TOTAL LIABILITIES AND STOCKHOLDER'S EQUITY 487400 520400

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