Below is the comparative balance sheet for Swifty Corporation. Dec. 31, 2017 Dec. 31, 2016 Cash...

Below is the comparative balance sheet for Swifty Corporation.

	Dec. 31, 2017		Dec. 31, 2016
Cash	$16,500		$20,900
Short-term investments	24,800		18,800
Accounts receivable	42,700		45,400
Allowance for doubtful accounts	(1,700	)	(2,000	)
Prepaid expenses	4,200		2,400
Inventory	81,200		65,700
Land	49,700		49,700
Buildings	125,700		73,400
Accumulated depreciation—buildings	(29,800	)	(22,800	)
Equipment	53,200		46,300
Accumulated depreciation—equipment	(19,100	)	(15,500	)
Delivery equipment	38,800		38,800
Accumulated depreciation—delivery equipment	(22,100	)	(20,700	)
Patents	15,200		–0–
	$379,300		$300,400

Accounts payable	$26,300		$15,800
Short-term notes payable (trade)	4,000		5,900
Accrued payables	3,000		4,600
Mortgage payable	72,900		53,900
Bonds payable	50,100		62,200
Common stock	140,800		103,000
Paid-in capital in excess of par	10,100		3,900
Retained earnings	72,100		51,100
	$379,300		$300,400

Dividends in the amount of $15,000 were declared and paid in 2017.

From this information, prepare a worksheet for a statement of cash flows. Make reasonable assumptions as appropriate. The short-term investments are considered available-for-sale and no unrealized gains or losses have occurred on these securities. (Enter amounts either in debit or in credit column in Statement of Cash Flows Effects except for totals.)

Solutions

Expert Solution

Statement of cash flows using the indirect method:

Particulars		Amount ($)
Cash from operating Activities
Retained Earnings (72100-51100)		21000
Add: Depreciation on Building (29800-22800) Depreciation on Equipment (19100-15500) Depreciation on Delivery Equipment (22100-20700) Dividend Paid	7000 3600 1400 15000
Cash Operating activities before working capital adjustments, and taxes		48000
Working Capital Adjustments
Add: Increase in Mortgage Payable (72900-53900) Increase in Accounts Payable (26300-15800) Decrease in Accounts Receivable (45400-42700)	19000 10500 2700
Less: Increase in Short Term Investments (24800-18800) Increase in Inventory (81200-65700) Decrease in Short Term Notes Payable (5900-4000) Increase in prepaid Expenses (4200-2400) Decrease in Accrued Payables (4600-3000) Decrease in Allowance for Doubtful Debts (2000-1700)	-6000 -15500 -1900 -1800 -1600 -300
Cash from operating activities before taxes and extraordinary items		53100
Less: Taxes		-
Cash from operating activities		53100
Cash from investing activities
Less: Purchase of Equipment (53200-46300) Less: Purchase of Patents Less: Purchase of building (125700-73400)	-6900 -15200 -52300
Cash from Investing Activities		-74400
Cash from financing Activities
Add: Issue of common stock (140800+10100-103000-3900)	44000
Less: Redemption of bond payable (62200-50100) Less: Cash Dividend paid	-12100 -15000
Cash from financing activities		16900
Net Increase / decrease in cash		-4400
Opening Cash Balance		$20900
Closing Cash Balance		$16500

ekkarill92 answered 1 year ago

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