Presented below is a condensed version of the comparative balance sheets for Son
ID: 2458508 • Letter: P
Question
Presented below is a condensed version of the comparative balance sheets for Sondergaard Corporation for the last two years at December 31. 2012 2011
Cash $157,000 $78,000
Accounts receivable $180,000 $185,000
Investments $52,000 $74,000
Equipment $298,000 $240,000
Less: Accumulated depreciation—equipment $(106,000) $(89,000)
Current liabilities $134,000 $151,000
Capital stock $160,000 $160,000
Retained earnings $287,000 $177,000
Additional information: Investments were sold at a loss (not extraordinary) of $7,000; no equipment was sold; cash dividends paid were $50,000; and net income was $160,000.
Prepare a statement of cash flows for 2012 for Sondergaard Corporation.
Explanation / Answer
Statement of cash flows:
Particulars
Amount ($)
Cash from operating Activities
Net profit
$160000
Add: Depreciation
Loss on sale of investments
$17000
$7000
Cash Operating activities before working capital adjustments, and taxes
184000
Working Capital Adjustments
Add: Decrease in Debtors (185000-180000)
$5000
Add: Decrease in Current Liabilities (151000-134000)
-$17000
Cash from operating activities before taxes
172000
Less: Taxes
-
Cash from operating activities
172000
Cash from investing activities
Add: Sale of Investments
$15000
Less: Purchase of Equipment
-$58000
Cash from Investing Activities
-$43000
Cash from financing Activities
Less: Dividend paid
-$50000
Cash from financing activities
-$50000
Net Increase / decrease in cash
$79000
Opening Cash Balance
$78000
Closing Cash Balance
$157000
Particulars
Amount ($)
Cash from operating Activities
Net profit
$160000
Add: Depreciation
Loss on sale of investments
$17000
$7000
Cash Operating activities before working capital adjustments, and taxes
184000
Working Capital Adjustments
Add: Decrease in Debtors (185000-180000)
$5000
Add: Decrease in Current Liabilities (151000-134000)
-$17000
Cash from operating activities before taxes
172000
Less: Taxes
-
Cash from operating activities
172000
Cash from investing activities
Add: Sale of Investments
$15000
Less: Purchase of Equipment
-$58000
Cash from Investing Activities
-$43000
Cash from financing Activities
Less: Dividend paid
-$50000
Cash from financing activities
-$50000
Net Increase / decrease in cash
$79000
Opening Cash Balance
$78000
Closing Cash Balance
$157000
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