Take-Home Exercise Chapter 16 14,800 27,800 -48500 Cash Accounts Receivable Inve

Question

Take-Home Exercise Chapter 16 14,800 27,800 -48500 Cash Accounts Receivable Inventories Prepaid Expenses 219,400 224,300 348,700 8,000 120,000 425,000 (194,000) 310,000 334,200 252,100 300,200 9,500 170,000 75000 21,000 Land Buildings Accumulated Depreciation-Buildings Equipment Accumulated Depreciation-Equipment(83,500) 600,000 (215,000) 310,000 (75,000) sca Total 1,507,500 1,386,400 Liabilities & Stockholders Equity Accounts Payable 11400 284,300 15,000 19,500 70,000 295,700 10,000 22,500 5000 -300 70000 V Dividends Payable Salaries payable Mortgage note Payable Bonds Payable Common Stock, $1 par Paid in capital Retained Earnings 102,000 20,000 50,000 22,000 150,000 946,700 1,507,500 o0000 60500 12q 500 Du 6000b 886 1,386,400 Total Additional Information: Net income of $120,500 in 2017 Depreciation expense of $21,000 on buildings and $8,500 on equipment A building was constructed for $175,000 A mortgage note for $70,000 was issued for cash 2,000 shares of common stock were issued at $51 in exchange for the bonds payable. Cash dividends declared of $60,000 in 2017 Land was sold for $100,000 V9 Prepare a Statement of Cash Flow using the indirect method

Explanation / Answer

STATEMENT OF CASH FLOW Amount in $ Amount in $ Net income $          1,20,500 Cash flows from operating activities Adjustments for: Depreciation of the year(21000 + 8,500) $             29,500 Loss on the sale of land $             20,000 $             49,500 Effects/ changes in Assets & Liabilities (Increase) / Decrease in Account receivables $            -27,800 Inventory Decrease / (Increase) $             48,500 Prepaid Expenses $              -1,500 Accounts payable Increase / ( Decrese) $            -11,400 Dividend Payable $                5,000 Salaries Payable $              -3,000 $                9,800 Net cash from operating activities $          1,79,800 Cash flows from investing activities Sale of Land $          1,00,000 Construction of building $        -1,75,000 Net cash used in investing activities $            -75,000 Cash flows from Financing activities Issue of Mortgage Note $             70,000 Dividend Paid $            -60,000 Net cash used in financing activities $             10,000 Net increase in cash and cash equivalents $          1,14,800 Add :Cash and cash equivalents at beginning of period $          2,19,400 Cash and cash equivalents at end of period $          3,34,200 Note :1) Exchange of note payable have no cash genreated because there is no cash in this transaction. 2) No effect of retaiend earning will be given 3) No cash flow from exchange of common stock

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