Exercise 12-7 Shown below are comparative balance sheets for Martinez Company Ma
ID: 2596457 • Letter: E
Question
Exercise 12-7 Shown below are comparative balance sheets for Martinez Company Martinez Company Comparative Balance Sheets December 31 2016 $70,268 242,744 603,666 319,400 638,800 Assets Cash Accounts receivable Inventory Land Equipment Accumulated depreciation-equipment Total Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings Total 2017 217,192 281,072 533,398 255,520 830,440 (210,804) (102,208) $1,906,818$1,772,670 137,342 638,800 555,756 440,772 $1,906,818 $1,772,670 $ 124,566 479,100 689,904 613,248 Additional information: 1. Net income for 2017 was $297,042 2. Depreciation expense was $108,596 3. Cash dividends of $124,566 were declared and paid 4. Bonds payable amounting to $159,700 were redeemed for cash $159,700 5. Common stock was issued for $134,148 cash 6. No equipment was sold during 2017 7. Land was sold for its book valueExplanation / Answer
Details
Net
Cash Flow from Operating Activities
Net Profit before tax
297,042
Add: Non Cash and Non Operating Expenses
Depreciation
108,596
Operating profit before Working Capital changes
405,638
Add: Increase in Current Liabilities And decrease in Current Assets
Decrease In Inventory
70,268
Less: Decrease in Current Liabilities And Increase in Current Assets
Increase in Accounts Receivable
(38,328)
Decrease in Accounts Payable
(12,776)
Cash Flow from Operating Activities (A)
424,802
Cash Flow from Investing Activities
Sale of Land
63,880
Purchase of equipment
(191,640)
Sale of Land
Cash Used in Investing Activities (B)
(127,760)
Cash Flow from Financing Activities
Issue of Shares
134,148
Bonds paid
(159,700)
Dividend Paid
(124,566)
Cash Used in Financing Activities ( C )
(150,118)
Increase in Cash Flow (A+B+C)
146,924
Opening Cash
70,268
Closing Cash
217,192
Details
Net
Cash Flow from Operating Activities
Net Profit before tax
297,042
Add: Non Cash and Non Operating Expenses
Depreciation
108,596
Operating profit before Working Capital changes
405,638
Add: Increase in Current Liabilities And decrease in Current Assets
Decrease In Inventory
70,268
Less: Decrease in Current Liabilities And Increase in Current Assets
Increase in Accounts Receivable
(38,328)
Decrease in Accounts Payable
(12,776)
Cash Flow from Operating Activities (A)
424,802
Cash Flow from Investing Activities
Sale of Land
63,880
Purchase of equipment
(191,640)
Sale of Land
Cash Used in Investing Activities (B)
(127,760)
Cash Flow from Financing Activities
Issue of Shares
134,148
Bonds paid
(159,700)
Dividend Paid
(124,566)
Cash Used in Financing Activities ( C )
(150,118)
Increase in Cash Flow (A+B+C)
146,924
Opening Cash
70,268
Closing Cash
217,192
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