Condensed financial data of Sunland Company for 2017 and 2016 are presented belo

Question

Condensed financial data of Sunland Company for 2017 and 2016 are presented below.

SUNLAND COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

2017

2016

$1,830

$1,130

1,770

1,290

1,620

1,920

1,940

1,680

(1,190

(1,170

1,300

1,410

$7,270

$6,260

$1,220

$910

210

260

1,420

1,530

1,890

1,710

2,530

1,850

$7,270

$6,260

SUNLAND COMPANY
INCOME STATEMENT
FOR THE YEAR ENDED DECEMBER 31, 2017

$7,100

4,760

2,340

930

1,410

80

1,490

550

260

$680

Additional information:

During the year, $80 of common stock was issued in exchange for plant assets. No plant assets were sold in 2017.

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

SUNLAND COMPANY
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

2017

2016

Cash

$1,830

$1,130

Receivables

1,770

1,290

Inventory

1,620

1,920

Plant assets

1,940

1,680

Accumulated depreciation

(1,190

)

(1,170

) Long-term investments (held-to-maturity)

1,300

1,410

$7,270

$6,260

Accounts payable

$1,220

$910

Accrued liabilities

210

260

Bonds payable

1,420

1,530

Common stock

1,890

1,710

Retained earnings

2,530

1,850

$7,270

$6,260

SUNLAND COMPANY Statement of Cash Flows For the Year Ended December 31, 2017 (Direct Method) Cash Flows from Operating Activitles Cash Receipts from Customers 6620 Cash Pald for Merchandise (4130) (950) Cash Pald for Income Taxes (550) (5630) Net Cash Provided by Operating Actlvities 990 Cash Flows from Investing Activities Sale of Investments 190 Purchase of Plant Assets (180) Net Cash Provided by Investing Activitles 10 Cash Flows from Financing Activitles Redemption of Bonds Payable (110)

Explanation / Answer

Prepare a statement of cash flows using the direct method

Cash flow from operating activities Cash receipts from customer 6620 Cash paid for merchandise (4150) Cash paid for selling/administrative expense (960) Cash paid for income tax (550) (5660) Net cash provided from operating activities 960 Cash flow from investing activities Sale of investment 190 Purchase of plant assets (180) Net cash provided by investing activities 10 Cash flow from financing activities Redemption of bonds payable (110) Payment of cash dividends (260) Issue common stock 100 Net cash used by financing activities (270) Net increase in cash 700 Cash at beginning of period 1130 Cash at end of period 1830 Non cash investing and financing activities Issuance of common stock for plant assets 80

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