1 Condensed financial data of Sheffield Corp. follow. Sheffield Corp. Comparativ

Question

1

Condensed financial data of Sheffield Corp. follow.

Sheffield Corp.
Comparative Balance Sheets
December 31

Assets

2017

2016

$ 104,232

$ 62,436

113,262

49,020

145,125

132,677

36,636

33,540

178,020

140,610

367,650

312,825

(64,500

)

(67,080

)

$880,425

$664,028

Liabilities and Stockholders’ Equity

$ 131,580

$ 86,817

21,285

27,090

141,900

188,340

283,800

225,750

301,860

136,031

$880,425

$664,028

Sheffield Corp.
Income Statement Data
For the Year Ended December 31, 2017

$501,113

$174,743

16,009

59,985

35,191

6,102

9,675

301,705

$ 199,408

Additional information:

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Adjustments to reconcile net income to

Sheffield Corp.
Comparative Balance Sheets
December 31

Assets

2017

2016

Cash

$ 104,232

$ 62,436

Accounts receivable

113,262

49,020

Inventory

145,125

132,677

Prepaid expenses

36,636

33,540

Long-term investments

178,020

140,610

Plant assets

367,650

312,825

Accumulated depreciation

(64,500

)

(67,080

)

Total

$880,425

$664,028

Liabilities and Stockholders’ Equity

Accounts payable

$ 131,580

$ 86,817

Accrued expenses payable

21,285

27,090

Bonds payable

141,900

188,340

Common stock

283,800

225,750

Retained earnings

301,860

136,031

Total

$880,425

$664,028

Explanation / Answer

Answer:

Sheffield Corp.

Statement of Cash Flows
(indirect method)

Cash flow from operating activity

Net income

199408

Adjustment to reconcile the net income

Depreciation

59985

Loss on disposal of plant assets

9675

Increase in Accounts receivable

-64242

Increase in Accounts Inventory

-12448

Increase in Accounts Prepaid Exp

-3096

Increase in Accounts payable

44763

Decrease in Accrues exp payable

-5805

Net increase/decrees

28832

Cash flow from operating activity

228240

Cash flow from Investing activity

Purchase of plant

-129000

purchase of long term investment

-37410

Sell of assets

1935

Cash flow from Investing activity

-164475

Cash flow from Financing activity

payment of Bonds payable

-46440

payment of Devidend payable

-33579

issue of common stock

58050

Cash flow from Financing activity

-21969

Net increse or decrese in cash

41796

Add: opeaning cash balace

62436

Closing cash balace

104232

Sheffield Corp.

Statement of Cash Flows
(indirect method)

Cash flow from operating activity

Net income

199408

Adjustment to reconcile the net income

Depreciation

59985

Loss on disposal of plant assets

9675

Increase in Accounts receivable

-64242

Increase in Accounts Inventory

-12448

Increase in Accounts Prepaid Exp

-3096

Increase in Accounts payable

44763

Decrease in Accrues exp payable

-5805

Net increase/decrees

28832

Cash flow from operating activity

228240

Cash flow from Investing activity

Purchase of plant

-129000

purchase of long term investment

-37410

Sell of assets

1935

Cash flow from Investing activity

-164475

Cash flow from Financing activity

payment of Bonds payable

-46440

payment of Devidend payable

-33579

issue of common stock

58050

Cash flow from Financing activity

-21969

Net increse or decrese in cash

41796

Add: opeaning cash balace

62436

Closing cash balace

104232

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