WINDSOR INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016
ID: 2526902 • Letter: W
Question
WINDSOR INC.
COMPARATIVE BALANCE SHEET ACCOUNTS
AS OF DECEMBER 31, 2017 AND 2016
December 31
2017
2016
$42,200
$33,900
71,100
60,200
30,100
24,100
22,500
38,700
29,900
18,900
67,800
56,400
7,600
7,600
$271,200
$239,800
$2,200
$1,500
5,700
2,300
13,600
9,000
34,700
24,500
3,500
2,600
21,100
30,700
150,000
125,000
40,400
44,200
$271,200
$239,800
Additional data (ignoring taxes):
Windsor’s 2017 income statement follows (ignoring taxes).
$538,000
377,700
160,300
120,800
39,500
$3,800
(800
3,000
$42,500
(b) Prepare a statement of cash flows using the indirect method.
WINDSOR INC.
COMPARATIVE BALANCE SHEET ACCOUNTS
AS OF DECEMBER 31, 2017 AND 2016
December 31
Debit Accounts2017
2016
Cash$42,200
$33,900
Accounts Receivable71,100
60,200
Inventory30,100
24,100
Equity investments22,500
38,700
Machinery29,900
18,900
Buildings67,800
56,400
Land7,600
7,600
$271,200
$239,800
Credit Accounts Allowance for Doubtful Accounts$2,200
$1,500
Accumulated Depreciation—Machinery5,700
2,300
Accumulated Depreciation—Buildings13,600
9,000
Accounts Payable34,700
24,500
Accrued Payables3,500
2,600
Long-Term Notes Payable21,100
30,700
Common Stock, no-par150,000
125,000
Retained Earnings40,400
44,200
$271,200
$239,800
Explanation / Answer
Total Depreciation = 8,750
Depreciation on Buildings = 13,600-9000= 4,600
Depreciation on Machinery = 8,750 - 4,600 = 4,150
Note: The Stock dividend paid and the capitalisation of retained earnings do not affect the cash balances. These are adjustments within the equity account. Hence the same is not reflected in the cash flow statement.
The Final Cash flow Statement looks like:
Equity Investments Opening Balance 38,700 Less: Sale -24,800 Less: Closing Balance -22,500 Cash Flow on Purchase of Equity Investment -8,600Related Questions
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