Flint Inc., a greeting card company, had the following statements prepared as of
ID: 2535851 • Letter: F
Question
Flint Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
FLINT INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17
12/31/16
$5,900
$6,900
61,400
50,800
35,000
17,800
40,000
59,400
5,000
3,900
155,200
129,000
(35,000
)
(25,000
)
45,600
49,900
$313,100
$292,700
$46,300
$39,800
3,900
6,100
7,900
3,900
8,000
10,100
60,100
68,400
100,000
100,000
30,000
30,000
56,900
34,400
$313,100
$292,700
FLINT INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2017
$338,600
174,500
164,100
119,100
45,000
$11,400
1,900
9,500
35,500
7,100
$28,400
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).)
FLINT INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17
12/31/16
Cash$5,900
$6,900
Accounts receivable61,400
50,800
Short-term debt investments (available-for-sale)35,000
17,800
Inventory40,000
59,400
Prepaid rent5,000
3,900
Equipment155,200
129,000
Accumulated depreciation—equipment(35,000
)
(25,000
)
Copyrights45,600
49,900
Total assets$313,100
$292,700
Accounts payable$46,300
$39,800
Income taxes payable3,900
6,100
Salaries and wages payable7,900
3,900
Short-term loans payable8,000
10,100
Long-term loans payable60,100
68,400
Common stock, $10 par100,000
100,000
Contributed capital, common stock30,000
30,000
Retained earnings56,900
34,400
Total liabilities & stockholders’ equity$313,100
$292,700
Explanation / Answer
FLINT INC. Statement of Cash Flow From Direct method AS OF DECEMBER, 2017 Amount in $ Cash Flow from Operating Activities Cash Received From Customers (Note-1) 328000 Less :Cash Payment Cash paid for inventory (Note-2) -148600 Cash paid for Operating Expenses (Note-4) -87830 Cash paid for Interest -11400 Cash paid for Income Tax (Note-5) -9300 Net Cash Flow from operating Activities (A) 70870 Cash Flow from Investing Activities Sale of Equipment (20100*30% +1900) 7930 Purchase of Short term debt Investments (35000-17800) -17200 Purchase of Equipment (155200+20100-129000) -46300 Net Cash Used from Investing Activities (B) -55570 Cash Flow from Financing Activities Cash paid for dividends -5900 Cash paid for Short term loan payable -2100 Cash paid for Long term loan payable -8300 Net Cash Used from operating Activities ( C ) -16300 Net increase (Decrease) in Cash (A+B+C) -1000 Cash balance beginning of the year 6900 Cash balance at end of the year 5900 Note-1 Cash Received From Customers Beginning Account receivable 50800 Add : Sale 338600 less : Ending Accounting Receivable -61400 328000 Note-2 Cash Paid for Inventory Beginning Account payable 39800 add : cost of goods sold 174500 less : Ending Account Payable -46300 Less : Beginning Inventory -59400 Add : Ending Inventory 40000 148600 Note-3 Depreciation of the year Add: Depreciation on Sale of the Year 14070 less : Ending Accumulated Depreciation 35000 Beginning Accumulated Depreciation -25000 24070 Note-4 Cash Paid for Operating Expenses As per income Statement 119100 less : Amortization of Copyrights (49900-45600) -4300 less : Depreciation -24070 beginning Salaries & wages payable 3900 Less : Ending Salaries & wages payable -7900 Less : beginning Prepaid Rent -3900 Add : Ending Prepaid Rent 5000 87830 Note-5 Cash Paid for Income tax Beginning Income Tax payable 6100 add : Income tax 7100 less : Ending Income Tax Payable -3900 9300
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