Exam 3 Chapters 10-13 M McGraw-Hill Connect × x C O Not secure l ezto.mheducatio

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Exam 3 Chapters 10-13 M McGraw-Hill Connect × x C O Not secure l ezto.mheducation.com/hm.tpx Question 3 (c 3. The management team of Wickersham Brothers statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statements are summarized Inc, is preparing its annual financial statements. The Year Prior Year Balance Sheet Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation $ 62,100 $ 83,700 92,000 80,500 74,750 128,000 69,000 (35,920) (18,000) 69,000 Total assets S315,180 $289,95 Liabiitbies Accounts payable Salaries and Wages Payable Notes payable, long-term s 11,500 13,800 1,150 2,300 57,500 69,000 Stockholders Equity Common stock Retained earnings 112,000 92,000 131,880 114,000 Total liabilities and stockholders' equity $315,180 $289,950 Income Statement Sales Cost of goods sold Other expenses Net income $260,000 140,000 17,920 65,000 $ 37,080 Other information from the company's records includes the following a. Bought equipment for cash, $59,000. b Paid $11,500 on long-term note payable c. Issued new shares of common stock for $20,000 cash d. Cash dividends of $19,200 were declared and paid to stockholders. e. Accounts Payable arose from inventory purchases on credit t. Income tax expense ($9,270) and interest expense ($3,450) were paid in full at the end of both years and are included in Other Expenses Required

Explanation / Answer

WICKERSHAM BROTHERS Inc. Statement of Cash Flows For the Year Ended December 31 Cash Flows from Operating Activities: Net income 37080 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 17920 Changes in current assets and current liabilities: Accounts Receivable -11500 Inventories 5750 Accounts payable -2300 Salaries and wages payable 1150 Net cash provided by operating activities $ 48100 Cash Flows from Investing Activities: Additions to Property, plant, and equipment -59000 Net cash used in investing activities -59000 Cash Flows from Financing Activities: Payments on long-term debt -11500 Proceeds from issuance of stock 20000 Payment of cash dividends -19200 Net cash used in financing activities -10700 Decrease in cash and cash equivalents -21600 Cash and cash equivalents, beginning of period 83700 Cash and cash equivalents, end of period 62100 Supplemental Disclosures: Cash paid for interest 3450 Cash paid for income tax 9270

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