One Trick Pony, Inc. Comparative Balance Sheets For the Years Ended October 31,

Question

One Trick Pony, Inc. Comparative Balance Sheets For the Years Ended October 31, 2014 2013 Cash Accounts Receivable Inventory Prepaid Rent Land Plant and Equipment Accumulated Depreciation 84,500 32,500 10,000 12,000 8,000 7,000 1,200 1,000 75,000 75,000 250,000 150,000 (75,000) (25,000) 353,700 252,500 Total Assets Accounts Payable Income Taxes payable Short Term Notes Payable Long Term Bonds Payable Common Stock Retained Earnings Total Liabilities and Equity 15,000 15,000 2,500 2,000 20,000 22,500 147,500 72,500 150,000 100,000 18,700 40,500 353,700 252,500 Notes: Equipment was acquired by exchanging $50,000 bonds payable, 25,000 shares $1.00 par value common stock, and the remainder in cash. Cash Dividends of $5,000 were declared and paid. A net loss of $16,800 which included $50,000 depreciation expense was recorded

Explanation / Answer

Statement of Cash Flow Particulars Amount Total Amount Income      (16,800.00) Depreciation        50,000.00 Decrease in AR          2,000.00 Increase in inventory        (1,000.00) Increase in prepaid rent            (200.00) Increase in Income taxes payable              500.00 Decrease in short term notes payable        (2,500.00) Cash flow from operating activities           32,000.00 Cash flow from Investing activities Purchase of PPE      (25,000.00) Cash flow from Investing activities         (25,000.00) Cash flow from Financing activities Issue of Stock        25,000.00 Issue of long term notes payable        25,000.00 Dividends Paid        (5,000.00) Cash flow from Financing activities           45,000.00 Opening cash and cash equivalents           32,500.00 Closing cash and cash equivalents           84,500.00

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