Suppose the income statement for Goggle Company reports $167 of net income, afte

Question

Suppose the income statement for Goggle Company reports $167 of net income, after deducting depreciation of $17. The company bought equipment costing $150 and obtained a long-term bank loan for $152. Required 1. Calculate the c hange in each balance sheet account and indicate whether each account relates to operating, investing, and/or financing activities (+for increase and-for decrease). (Select "NE" if there is no effect. Enter all amounts as positive values.) Change Type Previous Year Current Year 376 211 153 740 (44) 1436 86 615 28 707 1436 53 S Cash Accounts Receivable Inventory Equipment Accumulated Depreciation - Equipment 93 350 590 (27) 1,059 $ Total Salaries and Wages Payable Notes Payable (long-term) Common Stock Retained Earnings 28 s 463 28 540 Total 1,059 S

Explanation / Answer

1) Previous Year Current Year Change Type Cash 53 376 323 Accounts receivable 93 211 118 Operating Inventory 350 153 -197 Operating Equipment 590 740 150 Investing Accumulated depreciation -27 -44 -17 Operating Total 1059 1436 377 Salaries and Wages Payable 28 86 58 Operating Notes Payable (Long term) 463 615 152 Financing Common Stock 28 28 NE Retained Earning 540 707 167 Operating Total 1059 1436 377 2) GOGGLE COMPANY Statement of cash flows For the Year ended December 31 Cash flow from operating activities: Net Income 167 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation 17 Change in current assets and current liabilities Increase in Accounts receivable -118 Decrease in Inventory 197 Increase in Salaries and Wages Payable 58 154 Net Cash provided by operating activities 321 Cash flow from investing actiivties; Purchase of equipment -150 Net Cash used in investing activities -150 Cash flow from financing activitiies: Obtained long term bank loan 152 Net cash provided by Financing activities 152 Net Cash flow for the Year 323 Cash at the beginning of the year 53 cash at the end of the year 376

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