ROJAS CORPORATION Comparative Balance Sheets December 31 2017 2016 $14,800 $10,3
ID: 2459131 • Letter: R
Question
ROJAS CORPORATION
Comparative Balance Sheets
December 31
2017
2016
$14,800
$10,300
21,500
23,500
20,300
26,400
70,000
70,000
(14,600
)
(10,400
)
$112,000
$119,800
$12,200
$28,600
74,400
74,000
25,400
17,200
$112,000
$119,800
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(a)
Adjustments to reconcile net income to
Rojas Corporation’s comparative balance sheets are presented below.ROJAS CORPORATION
Comparative Balance Sheets
December 31
2017
2016
Cash$14,800
$10,300
Accounts receivable21,500
23,500
Land20,300
26,400
Buildings70,000
70,000
Accumulated depreciation—buildings(14,600
)
(10,400
)
Total$112,000
$119,800
Accounts payable$12,200
$28,600
Common stock74,400
74,000
Retained earnings25,400
17,200
Total$112,000
$119,800
Additional information:
1. Net income was $22,900. Dividends declared and paid were $14,700. 2. No noncash investing and financing activities occurred during 2017 3. The land was sold for cash of $4,500.
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Explanation / Answer
The cash flow statement and related notes is presented below:
Notes:
Depreciation = Accumulated depreciation (2017) - Accumulated depreciation (2016)
= $ 14,600 - $ 10,400
= $ 4,200
Loss on Sale of Land:
Decrease in value of Land as per Balance sheet
= $ 26,400 - $ 20,300
= $ 6,100
So, value of land sold was $ 6,100 and sale consideration was $ 4,500.
So, Loss on sale of Land
= $ 6,100 - $ 4,500
= $ 1,600
Particulars Amount $ Amount $ Net Income 22,900 Adjustments for Depreciation 4,200 Loss on sale of Land 1,600 Decrease in accounts receivable 2,000 Decrease in accounts payable -16,400 Cash Flows from operating activities 14,300 Sale of Land 4,500 Cash Flows from Investing activities 4,500 Dividend paid -14,700 Increase in common stock 400 Cash flows from financing activities -14,300 Net Cash Flows 4,500 Add: Opening cash and cash equivalents 10,300 Closing cash and cash equivalents 14,800Related Questions
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