Sweet Inc., a greeting card company, had the following statements prepared as of
ID: 2519178 • Letter: S
Question
Sweet Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
SWEET INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17
12/31/16
$5,900
$7,000
61,500
51,400
35,400
17,800
39,900
60,400
4,900
3,900
155,300
131,000
(34,700
(25,200
45,900
49,900
$314,100
$296,200
$46,500
$39,600
4,100
5,900
8,100
4,100
8,000
9,900
60,600
68,600
100,000
100,000
30,000
30,000
56,800
38,100
$314,100
$296,200
SWEET INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2017
$335,275
173,900
161,375
121,000
40,375
$11,500
2,000
9,500
30,875
6,175
$24,700
Additional information:
Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
SWEET INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17
12/31/16
Cash$5,900
$7,000
Accounts receivable61,500
51,400
Short-term debt investments (available-for-sale)35,400
17,800
Inventory39,900
60,400
Prepaid rent4,900
3,900
Equipment155,300
131,000
Accumulated depreciation—equipment(34,700
)(25,200
) Copyrights45,900
49,900
Total assets$314,100
$296,200
Accounts payable$46,500
$39,600
Income taxes payable4,100
5,900
Salaries and wages payable8,100
4,100
Short-term loans payable8,000
9,900
Long-term loans payable60,600
68,600
Common stock, $10 par100,000
100,000
Contributed capital, common stock30,000
30,000
Retained earnings56,800
38,100
Total liabilities & stockholders’ equity$314,100
$296,200
Explanation / Answer
Sweet inc. Cash Flow Statement For the year 31 Dec 2017 Statement of Cash flows Cash flows from operating activities Collection from Customers $325,175 Payment of Accounts Payable -$146,500 Payment of opearting expenses -$90,570 Payment of Income Tax (6175+(5900-4100)) -$7,975 Payment of Interest Expenses -$11,500 Net cash from operating activities $68,630 Cash flows from investing activities Sale of Equipment (19900*30%)+2000 $7,970 Purcahse of equipment (155300-(131000-19900) -$44,200 Purchase of Investments -$17,600 Net cash from investing activities -$53,830 Cash flows from financing activities Repayment of Long Term Note payable -$8,000 Repayment of Short Term Note payable -$1,900 Payment of cash Dividend -$6,000 Net cash used in financing activities -$15,900 Net Increase in cash and cash equivalents -$1,100 Cash and cash equivalents at beginning of period $7,000 Cash and cash equivalents at end of period $5,900 Working note 1. Collection from Customers $325,175 Net sales-Increase in Accounts Receivable 335275-(61500-51400) 2. Payment to suppliers $146,500 COGS-Decraese in Inventory-Increase in accounts payable 173900-(60400-39900)-(46500-39600) 3. Payment of opearting expenses $90,570 Operating expenses+ Increase in Salary and wages +Increase in prepaid-Depreciation 121000-4000+1000-23430**-4000*** **Depreciation= (34700-(25200-(70%*19900))=23430 ***Amortization of Copyright=(49900-45900)=4000
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