Following are selected balance sheet accounts of Allman Bros. Corp. at December

Question

Following are selected balance sheet accounts of Allman Bros. Corp. at December 31, 2017 and 2016, and the increases or decreases in each account from 2016 to 2017. Also presented is selected income statement information for the year ended December 31, 2017, and additional information.

2017

2016

Increase
(Decrease)

2017

2016

Increase

Additional information:

Determine the category (operating, investing, or financing) and the amount that should be reported in the statement of cash flows for the following items.

Selected balance sheet accounts Assets

2017

2016

Increase
(Decrease)

Accounts receivable $34,000 $24,000 $10,000 Property, plant, and equipment 277,000 247,000 30,000 Accumulated depreciation—plant assets (178,000 ) (167,000 ) (11,000 ) Liabilities and stockholders’ equity

2017

2016

Increase

Bonds payable $ 49,000 $46,000 $3,000 Dividends payable 8,000 5,000 3,000 Common stock, $1 par 22,000 19,000 3,000 Additional paid-in capital 9,000 3,000 6,000 Retained earnings 104,000 91,000 13,000 Selected income statement information for the year ended December 31, 2017: Sales revenue $155,000 Depreciation 33,000 Gain on sale of equipment 14,500 Net income 31,000

Explanation / Answer

1 Plant property and equipment Ending balance 277000 Add Equipment sold 45000 Total 322000 Less Beginning balance 247000 Equipment purchased 75000 Less Bonds issued 20000 Payment for purchase of plant property and equipment 55000 2 Retained earnings Beginning 91000 Add Net income 31000 Total 122000 Less Ending balance 104000 Dividends 18000 3 Equipment cost 45000 Less Accumulated depreciation 22000 Book value 23000 Add Gain on sale of equipment 14500 Proceeds from sale of equipment 37500 1 Payment for purchase of plant property and equipment Investing 55000 2 Proceeds from sale of equipment Investing 37500 3 Dividend paid Financing 18000 4 Redemption of bonds payable Financing 17000 (46000+20000-49000)

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