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MC Qu. 64 Illies Corporations comparative ... Illies Corporation\'s comparative

ID: 2576918 • Letter: M

Question

MC Qu. 64 Illies Corporations comparative ...

Illies Corporation's comparative balance sheet appears below:

Ending Balance

Beginning Balance

Assets:

Current assets:

   Cash and cash equivalents

$40,000

$33,000

   Accounts receivable

19,000

21,000

   Inventory

  67,000

  69,000

Total current assets

126,000

123,000

Property, plant, and equipment

358,000

339,000

   Less accumulated depreciation

156,000

132,000

Net property, plant, and equipment

202,000

207,000

Total assets

$328,000

$330,000

Liabilities and Stockholders’ Equity

Current liabilities:

   Accounts payable

$18,000

$19,000

   Accrued liabilities

54,000

59,000

   Income taxes payable

  48,000

  42,000

Total current liabilities

120,000

120,000

Bonds payable

  82,000

  86,000

Total liabilities

202,000

206,000

Stockholders’ equity:

   Common stock

23,000

22,000

   Retained earnings

103,000

102,000

Total stockholders’ equity

126,000

124,000

Total liabilities and stockholders’ equity

$328,000

$330,000



The company did not dispose of any property, plant, and equipment during the year. Its net income for the year was $5,000 and its cash dividends were $4,000. The company did not issue any bonds payable or purchase any of its own common stock during the year. Its net cash provided by operating activities and net cash used in financing activities are:

A) net cash provided by operating activities, $35,000; net cash used in financing activities,$7,000

B) net cash provided by operating activities, $33,000; net cash used in financing activities,$7,000

C) net cash provided by operating activities, $35,000; net cash used in financing activities,$1,000

D) net cash provided by operating activities, $33,000; net cash used in financing activities,$1,000

Ending Balance

Beginning Balance

Assets:

Current assets:

   Cash and cash equivalents

$40,000

$33,000

   Accounts receivable

19,000

21,000

   Inventory

  67,000

  69,000

Total current assets

126,000

123,000

Property, plant, and equipment

358,000

339,000

   Less accumulated depreciation

156,000

132,000

Net property, plant, and equipment

202,000

207,000

Total assets

$328,000

$330,000

Liabilities and Stockholders’ Equity

Current liabilities:

   Accounts payable

$18,000

$19,000

   Accrued liabilities

54,000

59,000

   Income taxes payable

  48,000

  42,000

Total current liabilities

120,000

120,000

Bonds payable

  82,000

  86,000

Total liabilities

202,000

206,000

Stockholders’ equity:

   Common stock

23,000

22,000

   Retained earnings

103,000

102,000

Total stockholders’ equity

126,000

124,000

Total liabilities and stockholders’ equity

$328,000

$330,000

Explanation / Answer

Answer will be:B) net cash provided by operating activities, $33,000; net cash used in financing activities,$7,000

Cash flows from operating activities Net Income $    5,000 Adjustment to reconcile net income to: Depreciation expense $ 24,000 Decrease in accounts receivable $    2,000 Decrease in inventory $    2,000 Decrease in accounts payable $ (1,000) Decrease in accrued liabilities $ (5,000) Increase in income tax payable $    6,000 $ 28,000 Net cash provided by operating activities $ 33,000