Spreadsheet and Statement of Cash Flows The following information was taken from
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Question
Spreadsheet and Statement of Cash Flows
The following information was taken from Lamberson Company's accounting records:
Additional information for the year:
Dividends declared and paid totaled $700.
On January 1, 2016, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion.
Long-term nonmarketable investments that cost $1,600 were sold for $2,300.
The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year.
Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets.
Equipment was purchased at a cost of $16,200.
The 12% bonds payable were issued on August 31, 2016, at 97. They mature on August 31, 2026. The company uses the straight-line method to amortize the discount.
Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable.
Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.
Prepare the statement of cash flows.
Operating Activities:
Prepare the statement of cash flows.
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Adjustment for noncash income items:
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Adjustments for cash flow effects from working capital items:
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Net cash provided by operating activities ______________
Investing Activities:
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Net cash used for investing activities ____________
Financing Activities:
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Net cash provided by financing activites ____________
Cash, january 1, 2016 _____________
Cash, december 31, 2016 ____________
Compute the cash flow from operations to sales ratio and the profit margin ratio for 2016. Round your answers to one decimal place.
Cash flows from operations ratio ________:%
Profit margin:___________ %
Account Balances Account Titles January 1,2016 December 31,
2016 Debits Cash $ 1,400 $ 2,400 Accounts Receivable (net) 2,800 2,690 Marketable Securities (at cost) 1,700 3,000 Allowance for Change in Value 500 800 Inventories 8,100 7,910 Prepaid Items 1,300 1,710 Investments (long-term) 7,000 5,400 Land 15,000 15,000 Buildings and Equipment 32,000 46,200 Discount on Bonds Payable — 290 $69,800 $85,400 Credits Accumulated Depreciation $16,000 $16,400 Accounts Payable 3,800 4,150 Income Taxes Payable 2,400 2,504 Wages Payable 1,100 650 Interest Payable — 400 Note Payable (long-term) 3,500 — 12% Bonds Payable — 10,000 Deferred Taxes Payable 800 1,196 Convertible Preferred Stock, $100 par 9,000 — Common Stock, $10 par 14,000 21,500 Additional Paid-in Capital 8,700 13,700 Unrealized Increase in Value of Marketable Securities 500 800 Retained Earnings 10,000 14,100 $69,800 $85,400
Explanation / Answer
Dear Student,
Regards,
Statement of Cash Flows for year ended Dec 31, 2016 Operating Activities Adjustment for non-cash items Net Income 4,800 Add: Income Tax expense 2,050 Add: Wages Expense 11,000 Less: Actual Wages paid (1,100+11,000-650) -11,450 Add: Loss on sale of equipment 200 Less: Gain on sale of investments -700 Less: Dividend Revenue -820 Add: Bond Interest expense 410 Add: Depreciation (non-cash expense) 2,100 Add: Amortisation of discount on issue of bonds (300/10*4/12) 10 Net Profit before working Capital changes 7,600 Add: Decrease in Account receivable (net) (2,800-2,690) 110 Add: Decrease in inventory (8,100- 7,910) 190 Less: Increase in prepaid items (1,710-1,300) -410 Add: Increase in Accounts Payable (4,150-3,800) 350 Add: Increase in Deferred tax payable (1,196-800) 396 Net Profit after working Capital changes 8,236 Less: Tax paid (2,400+2,050-2,504) -1,946 6,290 Investing Activities Sale of Long term Investments 2,300 Less: Purchase of Equipment -16,200 Add: Sale of equipment 100 Add: Dividend Income 820 Net Cash used for Investing Activities -12,980 Financing Activities 12% bonds payable (100*97) (issued) 9,700 Less: Interest paid on bonds (410-400) -10 Less: Dividend paid -700 Net Cash Flow from financing activity 8,990 Net Cash Flow from all the three activities 2,300 Cash , January 1 2016 (1,400+1,700) 3,100 Cash, December 31, 2016 (2,400+3,000) 5,400Related Questions
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