Below is the comparative balance sheet for Crane Corporation. Dec. 31, 2017 Dec.
ID: 2515621 • Letter: B
Question
Below is the comparative balance sheet for Crane Corporation.
Dec. 31, 2017
Dec. 31, 2016
$16,500
$20,800
25,000
18,900
43,200
44,600
(1,800
(1,900
4,100
2,500
81,700
65,500
49,500
49,500
125,000
73,100
(30,000
(22,800
52,800
46,200
(19,100
(15,500
39,400
39,400
(22,000
(20,500
14,900
–0–
$379,200
$299,800
$26,000
$16,200
3,900
6,100
3,000
4,600
72,900
53,100
49,500
62,400
138,700
102,600
10,100
4,000
75,100
50,800
$379,200
$299,800
Dividends in the amount of $15,000 were declared and paid in 2017.
From this information, prepare a worksheet for a statement of cash flows. Make reasonable assumptions as appropriate. The short-term investments are considered available-for-sale and no unrealized gains or losses have occurred on these securities.
Dec. 31, 2017
Dec. 31, 2016
Cash$16,500
$20,800
Short-term investments25,000
18,900
Accounts receivable43,200
44,600
Allowance for doubtful accounts(1,800
)(1,900
) Prepaid expenses4,100
2,500
Inventory81,700
65,500
Land49,500
49,500
Buildings125,000
73,100
Accumulated depreciation—buildings(30,000
)(22,800
) Equipment52,800
46,200
Accumulated depreciation—equipment(19,100
)(15,500
) Delivery equipment39,400
39,400
Accumulated depreciation—delivery equipment(22,000
)(20,500
) Patents14,900
–0–
$379,200
$299,800
Accounts payable$26,000
$16,200
Short-term notes payable (trade)3,900
6,100
Accrued payables3,000
4,600
Mortgage payable72,900
53,100
Bonds payable49,500
62,400
Common stock138,700
102,600
Paid-in capital in excess of par10,100
4,000
Retained earnings75,100
50,800
$379,200
$299,800
Explanation / Answer
Crane Corporation Cash Flow Statement For the year ended December 31, 2017 Cash flows from operating activities Net Income $ 39,300 75100-50800+15000 Adjustment to reconcile net income to: Depreciation expense $ 12,300 30000-22800+19100-15500+22000-20500 Decrease in accounts receivable $ 1,300 44600-43200-1900+1800 Increase in inventory $ (16,200) 65500-81700 Increase in prepaid expenses $ (1,600) 2500-4100 Increase in accounts payable $ 9,800 26000-16200 Decrease in accrued payable $ (1,600) 28000-25000 $ 4,000 Net cash flow from operating activities $ 43,300 Cash flows from investing activities Cash paid for acqistion of short term investments $ (6,100) 18900-25000 Cash paid for Purchase of building $ (51,900) 73100-125000 Cash paid for Purchase of equipment $ (6,600) 46200-52800 Cash paid for acquistion of patent $ (14,900) Net cash used for investing activities $ (79,500) Cash flows from financing activities Cash received from issuance of common stock $ 42,200 138700-102600+10100-4000 Cash paid for dividend $ (15,000) Repayment of short term notes $ (2,200) 3900-6100 Cash from mortgage borrowings $ 19,800 72900-53100 Repayment of bonds $ (12,900) 49500-62400 Net cash flow from financing activities $ 31,900 Net increase in cash and cash equivalents $ (4,300) Cash and cash equivalents at beginning of period $ 20,800 Cash and cash equivalents at end of period $ 16,500
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