Exercise 5-16 A comparative balance sheet for Swifty Corporation is presented be

Question

Exercise 5-16 A comparative balance sheet for Swifty Corporation is presented below. December 31 2017 2016 Assets Cash Accounts receivable Inventory Land Equipment Accumulated Depreciation-Equipment $72,890 22,000 83,820 67,930 181,820 190,930 72,820 111,930 261,820 201,930 (70,820) (43,930) Total Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings $602,350$550,790 $35,82048,930 150,000200,000 214,000164,000 202,530137,860 $602,350 $550,790 Total Additional information: 1. Net income for 2017 was $128,640. No gains or losses were recorded in 2017. 2. Cash dividends of $63,970 were declared and paid. 3. Bonds payable amounting to $50,000 were retired through issuance of common stock. Polisy I 2030-2018 John Wiley & Sons Inc. All Rights Reserved. A Division of John Wicy& SonsInc

Explanation / Answer

Swifty Corporation STATEMENT OF CASH FLOWS FOR THE YEAR ENDED December 31, 2017 Cash Flow Statement by indirect Method Detail Amount in $) Cash Flow from Operating activities:- Net Income during the year $128,640 Adjustment to Reconcile net income to net cash frlow from operating activities Depreciation $26,890 Changes in Current Operating Asset and Libilities Increase in Account Receivable -$15,890 Decrease in Inventories $9,110 Deccrease in Account Payable -$13,110 Net Cash Generated by Operating activities (A) $135,640 Cash flow from investing activities Sale of Land $39,110 Purchase Equipment -$59,890 Net Cash Generated by Investing activities (B) -$20,780 Cash Generated from Finance   Activities Issue $ 50000 common Stock for Retiring Bond Payable Dividend Paid -$63,970 Net Cash Generated by Financiang Activities ( C) -$63,970 Net Cash Generated ( A+B+C) $50,890 Opening Balance on 1st Jan 2017 $22,000 Closing Balance of Cash as on31 Dec 2017 $72,890

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