Sheridan Inc., a greeting card company, had the following statements prepared as
ID: 2591389 • Letter: S
Question
Sheridan Inc., a greeting card company, had the following statements prepared as of December 31, 2017.
SHERIDAN INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17
12/31/16
$5,900
$7,000
61,500
51,400
35,400
17,800
39,900
60,400
4,900
3,900
155,300
131,000
(34,700
(25,200
45,900
49,900
$314,100
$296,200
$46,500
$39,600
4,100
5,900
8,100
4,100
8,000
9,900
60,600
68,600
100,000
100,000
30,000
30,000
56,800
38,100
$314,100
$296,200
SHERIDAN INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2017
$335,275
173,900
161,375
121,000
40,375
$11,500
2,000
9,500
30,875
6,175
$24,700
Additional information:
Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
SHERIDAN INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016
12/31/17
12/31/16
Cash$5,900
$7,000
Accounts receivable61,500
51,400
Short-term debt investments (available-for-sale)35,400
17,800
Inventory39,900
60,400
Prepaid rent4,900
3,900
Equipment155,300
131,000
Accumulated depreciation—equipment(34,700
)(25,200
) Copyrights45,900
49,900
Total assets$314,100
$296,200
Accounts payable$46,500
$39,600
Income taxes payable4,100
5,900
Salaries and wages payable8,100
4,100
Short-term loans payable8,000
9,900
Long-term loans payable60,600
68,600
Common stock, $10 par100,000
100,000
Contributed capital, common stock30,000
30,000
Retained earnings56,800
38,100
Total liabilities & stockholders’ equity$314,100
$296,200
Explanation / Answer
Sheridan Inc.
Statement of Cash Flows
For the year ended December 31, 2017
Workings:
Accounts Receivable:
Inventory:
Accounts Payable:
Income Taxes Payable:
Equipment:
Accumulated Depreciation: Equipment
Asset Disposal :
Cash operating expenses = Total Operating Expenses - Depreciation Expense - Amortization Expenses $ 121,000 - $ 23,430 - $ 4,000 = $ 93,570.
Cash paid for operating expenses = Cash operating expenses + ( Salaries and Wages Payable + Short Term Loans Payable) BB - EB + Prepaid Expenses EB - BB = $ 93, 570 + $ 14,000 - $ 16,100 + $ 4,900 - $ 3,900 = $ 92,470.
$ $ Cash Flows from Operating Activities Cash collected from customers 325,175 Cash paid to suppliers of inventory (146,500) Cash paid for operating expenses (92,470) Cash flows before income taxes 86,205 Income Taxes paid (7,975) Net cash provided by operations 78,230 Cash Flows from Investing Activities Sale proceeds of equipment 7,970 Cash paid to purchase equipment (44,200) Acqusition of short term investments (17,600) Net cash used in Investing Activities (53,830) Cash Flows from Financing Activities Loans repaid (8,000) Interest paid (11,500) Dividends paid (6,000) Net cash used in Financing Activities (25,500) Decrease in cash and cash equivalents (1,100) Beginning cash and cash equivalents 7,000 Ending cash and cash equivalents 5,900Related Questions
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