P12-118 The comparative balance sheets for Berkler Company as of December 31 are

Question

P12-118 The comparative balance sheets for Berkler Company as of December 31 are presented below. BERKLER COMPANY Comparative Balance Sheets December 31 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment S 116,160 $ 94,380 84,700 66,550 21,780 174,240 363,000 91,960 62,920 26,620 133,100 363,000 [72,600)(60,500) 319,440 254,100 [108,900) (96,800) Total S 931,700 901,450 Liabilities and Stockholders Equity Accounts payable Bonds payable Common stock, $1 par Retained earnings S 31,460 42,350 484,000 145,200 229,900 S 931,700 901,450 423,500 205,700 271,040 Total Additional information: 1. Operating expenses include depreciation expense of 2. Land was sold for cash at book value. 3. Cash dividends were paid in the amount of 4. Net income for 2017 was 5. Equipment was purchased for cash in the amount of S 58,080 S14,520 S55,660 S 106,480 S41,140 S7,260 S10,890 In addition, equipment costing with a book value of was sold for cash in the amount of 6. Bonds were converted at face value by issuing 60,500 shares of $1 par value common stock. Prepare a statement of cash flows for the year ended December 31, 2017 using the 2016, Wiley

Explanation / Answer

Cash Flow Statement (Indirect Method) Particulars Amount $ Cash Flow from Operating Activities Net Income 55660 Adjustments Add: Depreciation & Amortisation 58080 Decreasing in Inventory 3630 Increase in Accounts Receivable -7260 Decrease in Accounts Payable -10890 Increase in Prepaid expenses -4840 Gain on sale of equipment -3630 Total Cash Flow from Operating Activities 90750 Cash flows from investing activities Purchase of property, plant, and equipment -1,06,480 Proceeds from sale of Equipment 10,890 Proceeds from sale of Land 41,140 Net cash used in investing activities -54,450 Cash flows from financing activities Cash dividend paid -14,520 Net cash used in financing activities -14,520 Net increase in cash and cash equivalents 21,780 Cash and cash equivalents at beginning of period 94,380 Cash and cash equivalents at end of period $1,16,160

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