Hunter Company is developing its annual financial statements at December 31, 201

Question

Hunter Company is developing its annual financial statements at December 31, 2015. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized Balance Sheet at December 31 Cash Accounts Receivable Inventory Equipment $44,880 14,000 21,000 28,000 94,000 Accumulated Depreciation-Equipment (33,800) (26,000) 19,800 22,800 102,200 $155,880 $131,000 Accounts Payable Salaries and Wages Payable Note Payable (long-term) Common Stock Retained Earnings $ 20,200 880 28,000 76,000 30,800 $ 18,000 1,000 40,000 52,000 20,000 $155,880 $131,000 Income Statement for 2015 Sales Revenue Cost of Goods Sold Other Expenses $118,000 70,000 34,200 Net Income $ 13,800 Additional Data a. Bought equipment for cash, $8,200. b. Paid $12,000 on the long-term note payable c. Issued new shares of stock for $24,000 cash d. Declared and paid a $3,000 cash dividend e. Other expenses included depreciation, $7,800; salaries and wages, $11,800; taxes, $4,800; utilities, S9,800 f. Accounts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash.

Explanation / Answer

GOGGLE COMPANY

Statement of Cash Flows

For the year Ended December 31

Cash flows from operating activities;

Net income

$13800

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

$7800

Changes in current assets and current liabilities;

Decrease in account receivable

$1200

Decrease in inventory

$5200

Increase in account payable

$2200

Decrease in salaries and wages payable

- $120

$16280

Net cash flows from operating activities

$30080

Cash flows from investing activities;

Equipment purchased

- $8200

Net cash used in investing activities

- $8200

Cash flows from financing activities;

Paid for long-term note payable

- $12000

Issue of new shares

$24000

Cash dividend paid

- $3000

Net cash flows from financing activities

$9000

Net increase in cash balance ($30080 + $9000 - $8200)

$30880

+ Beginning cash balance

$14000

Ending cash balance

$44880

GOGGLE COMPANY

Statement of Cash Flows

For the year Ended December 31

Cash flows from operating activities;

Net income

$13800

Adjustments to reconcile net income to net cash provided by operating activities:

Depreciation

$7800

Changes in current assets and current liabilities;

Decrease in account receivable

$1200

Decrease in inventory

$5200

Increase in account payable

$2200

Decrease in salaries and wages payable

- $120

$16280

Net cash flows from operating activities

$30080

Cash flows from investing activities;

Equipment purchased

- $8200

Net cash used in investing activities

- $8200

Cash flows from financing activities;

Paid for long-term note payable

- $12000

Issue of new shares

$24000

Cash dividend paid

- $3000

Net cash flows from financing activities

$9000

Net increase in cash balance ($30080 + $9000 - $8200)

$30880

+ Beginning cash balance

$14000

Ending cash balance

$44880

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