Exercise B- Chapter 21 The Murdock Corporation reported the following balance sh

Question

Exercise B- Chapter 21 The Murdock Corporation reported the following balance sheet data for 2016 and 2015 201 2015 Cash $77 375 $22.955 5,500 0,000 65.00014 (not cash equivalents) 85,000 68.250 45,000 Prepaid insurance 1,500 Land, buildings, and equipment 1.250,000 , 125,000 1610,000)72,000) Total assets 876.205 $979,375 $76,340 20,000 25,000 ts payable $148,670 Salaries payable 24.500 Notes payable (current) 75,000 Bonds payable 200,000 Common stock 300,000 358,035328,035 $979,375 300,000 Retained earnings Total liabilities and shareholders' equity $876,205

Explanation / Answer

Statement of cash flow :

Cash flow from operating activities Net income 50000 Adjustment to reconcile net income Depreciation exp 53000 Gain on sale of equipment (1000) Gain on sale of available for sale security (4500) Increase account receivable (11750) Increase inventory (20000) Decrease prepaid insurance 500 Decrease account payable (72330) Decrease salary payable (4500) Decrease bonds payable (50000) Net cash flow from operating activities (60580) Cash flow from investing activities Sale of securities 6000 Sale of equipment 74000 Purchase of equipment (145000) Net cash flow from investing activities (65000) Cash flow from financing activities Dividend paid (20000) Issue bonds payable 200000 Net cash flow from financing activities 180000 Net cash flow 54420 Beginning cash 22955 Ending cash 77375

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