Question

The comparative balance sheet of Whitman Co. at December 31, 2016 and 2015, is as follows:1Dec. 31, 2016Dec. 31, 2015 2 Assets 3 Cash $918,790.00 $964,070.00 4 Accounts receivable (net)  828,170.00 761,040.00 5 Inventories 1,268,620.00 1,163,480.00 6 Prepaid expenses 29,330.00 34,930.00 7 Land 316,340.00 480,430.00 Buildings 1,461,710.00 900,600.00 9 Accumulated depreciation-buildings (408,700.00) (382,020.00) 10 Equipment 511,330.00 455,280.00 11 Accumulated depreciation-equipment (140,790.00) (158,240.00) 12 Total assets $4,784,800.00 $4,219,570.00 13 Liabilities and Stockholders’ Equity 14 Accounts payable (merchandise creditors) $922,480.00 $959,030.00 15 Bonds payable 269,000.00 0.00 16Common stock, $25 par 310,500.00 118,000.0017 Paid-in capital: Excess of issue price over par—common stock 736,100.00 559,000.00 18 Retained earnings 2,546,720.00 2,583,540.00 19Total liabilities and stockholders’ equity $4,784,800.00 $4,219,570.00 The noncurrent asset, noncurrent liability, and stockholders’ equity accounts for 2016 are as follows: ACCOUNT Land ACCOUNT NO. balance Date Item Debit Credit Debit Credit 2016          Jan.      1          Balance           480,430 Apr.   20 Realized $152,020 cash from sale 164,090 316,340     ACCOUNT BuildingsACCOUNT NO.         Balance Date               Item     Debit            Credit Debit   Credit2016                                                                  Jan.      1          Balance                                   900,600           Apr.     20        Acquired for cash        561,110                       1,461,710            ACCOUNT Accumulated Depreciation––BuildingsACCOUNT NO.          Balance           Date                 Item     Debit   Credit Debit   Credit2016                                                                  Jan.      1            Balance                                               382,020Dec.    31        Depreciation for year              26,680             408,700ACCOUNT EquipmentACCOUNT NO.      Balance           Date                 Item     Debit            Credit Debit   Credit2016                                                                  Jan.      1          Balance                                   455,280           26        Discarded, no salvage             47,170 408,110           Aug.    11            Purchased for cash      103,220                       511,330           ACCOUNT Accumulated Depreciation ––EquipmentACCOUNT NO.   Balance           Date                 Item     Debit   Credit Debit   Credit2016                                                                  Jan.      1          Balance 158,240 26    Equipment discarded   47,170                         111,070Dec.    31        Depreciation for year 29,720 140,790 ACCOUNT Bonds Payable ACCOUNT NO.         Balance           Date     Item Debit       Credit Debit   Credit2016                                                                  May     1          Issued 20-year bonds              269,000                       269,000ACCOUNT Common Stock $25 parACCOUNT NO.       Balance           Date                 Item     Debit   Credit Debit            Credit2016                                                                  Jan.      1          Balance                                               118,000Dec.    7          Issued 7,700 shares of common stock for $48 per share                    192,500                        310,500ACCOUNT Paid-In Capital in Excess of Par––Common StockACCOUNT NO.            Balance           Date                 Item     Debit   Credit Debit   Credit2016                                                                  Jan.      1          Balance                                               559,000Dec.    7          Issued 7,700 shares of common stock for $48 per share                177,100                       736,100ACCOUNT Retained EarningsACCOUNT NO.       Balance           Date                 Item     Debit   Credit Debit   Credit2016                                                                  Jan.      1          Balance                                               2,583,540Dec. 31            Net loss           5,160                           2,578,38031    Cash dividends            31,660                         2,546,720Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section.

Answer 1

Answer:

We have to Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities.

Whitman Co. at December 31, 2016 cash flow

Cash flow from operating activities	$	$
Net loss per income statemenr		-5160
Add: Loss on sale of land	12070
Add: Depreciation expense	56400	68470
Cash flows before working capital changes		68470-5160=63310
Less: increase in accounts receivable	-67130
Less: increase in inventories	-105140
Add:Decrease in prepaid expenses	5600
Less: Decrease in accounts payable	-36550	-203220
Cash outflows from operating activities		-203220+63310=139910
Cash flows from investing activities
Sales of land	152020
Purchase of building	-561110
Purchase of equiment	-103220
Total		152020-561110-103220=-512310
Cash flow from financial activities
Issuance of bonds payable	269000
Issuance of common stock at premium	369600
Cash dividends paid	-31660
Total		269000+369600-31660=606940
Net cash outflows for the year		-45280
Opening cash and cash equivalents		964070
Closing cash and cash equivalents		964070-45280=918790