Comparative balance sheet accounts of Ayayai Inc. are presented below. AYAYAI IN

Question

Comparative balance sheet accounts of Ayayai Inc. are presented below. AYAYAI INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 December 31 Debit Accounts 2017 2016 Cash Accounts Receivable Inventory Equity investments Machinery Buildings Land $42,400 70,600 30,100 22,000 30,300 67,900 $33,900 60,300 24,100 38,900 18,700 55,700 7,600 7,600 $270,900$%239,200 Credit Accounts Allowance for Doubtful Accounts Accumulated Depreciation-Machinery Accumulated Depreciation-Buildings Accounts Payable Accrued Payables Long-Term Notes Payable Common Stock, no-par $2,300 5,600 13,500 34,700 3,500 21,000 150,000 $1,500 2,200 8,900 24,500 2,600 30,800 125,000

Explanation / Answer

Requirement a: Net Cash Flow from Operating activities using Direct Method: Cash Collections from Customers 530900 Cash Payments to Suppliers 376800 Operating Expenses 109650 44450 Cash Collections from Customers: Sales Revenue 540400 Beginning Accounts Receivable (Net) 58800 Less: Ending Accounts Recceivable (Net) -68300 530900 Cash Payments to Suppliers: Cost of Goods Sold 381000 Ending Inventory 30100 Less: Beginning Inventory -24100 Purchases 387000 Add: Beginning Acccounts Payable 24500 Less: Ending Accounts Payable -34700 376800 Operating Expenses: Operating Expenses in Profit & Loss 119300 Less: Depreciation -8750 Add: Beginning Accrued Payables 2600 Less: Ending Accrued Payables -3500 109650 Requirement b: Statement of Cash Flows under Indirect Method: Particulars Amount ($) Cash Flow from operating Activities: Net Income 43000 Add: Loss on sale of investments Add: Depreciation 8750 Add: Loss on sale of machinery 800 Less: Gain on sale of Investments -3700 5850 Cash from operating activities before working capital adjustments 48850 Working Capital Adjustments: Increase in Accounts Receivable (70600-60300) -10300 Increase in Inventory (30100-24100) -6000 Increase in Accrued Payables (3500-2600) 900 Increase in Accounts Payable (34700-24500) 10200 Increase in Allowance for Doubtful Accounts (2300-1500) 800 -4400 Cash Flow from operating activities 44450 Cash Flow from Investing Activities: Sale of Equity investments 28400 Sales of Machinery 2250 Purchase of Machinery (30300-(18700-3800)) -15400 Purchase of Building (67900-55700) -12200 Purchase of Equity Investments (22000-(38900-24700)) -7800 -4750 Cash Flow from financing activities: Repayment of Long term Notes Payable (30800-21000) -9800 Dividend paid -21400 -31200 Cash Flow during the year 8500 Beginning Cash Balance 33900 Ending Cash Balance 42400

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