NOSKER COMPANY Comparative Balance Sheets December 31 Assets 2017 2016 $36,400 $
ID: 2543795 • Letter: N
Question
NOSKER COMPANY
Comparative Balance Sheets
December 31
Assets
2017
2016
$36,400
$20,500
32,500
18,800
30,700
20,100
59,700
77,800
(29,000
)
(23,600
)
$130,300
$113,600
Liabilities and Stockholders’ Equity
$28,900
$ 17,000
7,500
8,300
26,900
34,000
19,000
14,400
48,000
39,900
$130,300
$113,600
NOSKER COMPANY
Income Statement
For the Year Ended December 31, 2017
$242,700
176,300
66,400
24,400
42,000
3,500
38,500
8,100
$30,400
The following are the financial statements of Nosker Company.NOSKER COMPANY
Comparative Balance Sheets
December 31
Assets
2017
2016
Cash$36,400
$20,500
Accounts receivable32,500
18,800
Inventory30,700
20,100
Equipment59,700
77,800
Accumulated depreciation—equipment(29,000
)
(23,600
)
Total$130,300
$113,600
Liabilities and Stockholders’ Equity
Accounts payable$28,900
$ 17,000
Income taxes payable7,500
8,300
Bonds payable26,900
34,000
Common stock19,000
14,400
Retained earnings48,000
39,900
Total$130,300
$113,600
NOSKER COMPANY
Income Statement
For the Year Ended December 31, 2017
$242,700
Cost of goods sold176,300
Gross profit66,400
Operating expenses24,400
Income from operations42,000
Interest expense3,500
Income before income taxes38,500
Income tax expense8,100
Net income$30,400
Additional data:
1. Dividends declared and paid were $22,300. 2. During the year equipment was sold for $9,500 cash. This equipment cost $18,100 originally and had a book value of $9,500 at the time of sale. 3. All depreciation expense, $14,000, is in the operating expenses. 4. All sales and purchases are on account.
Further analysis reveals the following.
1. Accounts payable pertain to merchandise suppliers. 2. All operating expenses except for depreciation were paid in cash.
Explanation / Answer
Answer:
1
NOSKER COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income
$30,500
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense
$14,000
Increase in accounts payable
11,900
Decrease in income taxes payable
(800)
Increase in inventory
(10,600)
Increase in accounts receivable
(13,700)
800
Net cash provided by operating activities
31,300
Cash flows from investing activities
Sale of equipment
9,500
Cash flows from financing activities
Issuance of common stock
4,600
Redemption of bonds
(7,100)
Payment of dividends
(22,300)
Net cash used by financing activities
(24,800)
Net increase in cash
16,000
Cash at beginning of period
20,500
Cash at end of period
$36,500
2
Free cash flow
$31,300 - $0 - $22300
= $9,000
NOSKER COMPANY
Statement of Cash Flows
For the Year Ended December 31, 2017
Cash flows from operating activities
Net income
$30,500
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense
$14,000
Increase in accounts payable
11,900
Decrease in income taxes payable
(800)
Increase in inventory
(10,600)
Increase in accounts receivable
(13,700)
800
Net cash provided by operating activities
31,300
Cash flows from investing activities
Sale of equipment
9,500
Cash flows from financing activities
Issuance of common stock
4,600
Redemption of bonds
(7,100)
Payment of dividends
(22,300)
Net cash used by financing activities
(24,800)
Net increase in cash
16,000
Cash at beginning of period
20,500
Cash at end of period
$36,500
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