Question

The following financial statements and information are available for Gibson Industries Inc.

Balance Sheets
As of December 31
	Year 3				Year 2
Assets
Cash	$	161,500			$	121,600
Accounts receivable		104,400				85,900
Inventory		187,400				173,000
Marketable securities (available for sale)		290,100				221,100
Equipment		667,600				491,500
Accumulated depreciation		(308,800	)			(238,700	)
Land		81,200				119,300
Total assets		1,183,400				973,700
Liabilities and equity
Liabilities
Accounts payable (inventory)	$	37,600			$	67,300
Notes payable—Long-term		230,000				251,400
Bonds payable		202,600				101,300
Total liabilities		470,200				420,000
Stockholders’ equity
Common stock, no par		241,200				201,300
Preferred stock, $50 par		111,600				91,600
Paid-in capital in excess of par—Preferred stock		35,600				27,600
Total paid-In capital		388,400				320,500
Retained earnings		363,300				301,700
Less: Treasury stock		(38,500	)			(68,500	)
Total stockholders’ equity		713,200				553,700
Total liabilities and stockholders’ equity	$	1,183,400			$	973,700

Income Statement
For the Year Ended December 31, Year 3
Sales revenue					$	1,051,200
Cost of goods sold						(767,500	)
Gross profit						283,700
Operating expenses
Supplies expense	$	21,600
Salaries expense		93,300
Depreciation expense		91,300
Total operating expenses						(206,200	)
Operating income						77,500
Nonoperating items
Interest expense						(15,200	)
Gain from the sale of marketable securities						32,400
Gain from the sale of land and equipment						15,700
Net income					$	110,400

Additional Information

1. Sold land that cost $38,100 for $42,100.

2. Sold equipment that cost $28,900 and had accumulated depreciation of $21,200 for $19,400.

3. Purchased new equipment for $205,000.

4. Sold marketable securities that were classified as available-for-sale and that cost $43,000 for $75,400.

5. Purchased new marketable securities, classified as available-for-sale, for $112,000.

6. Paid $21,400 on the principal of the long-term note.

7. Paid off a $101,300 bond issue and issued new bonds for $202,600.

8. Sold 200 shares of treasury stock at its cost.

9. Issued some new common stock.

10. Issued some new $50 par preferred stock.

11. Paid dividends. (Note: The only transactions to affect retained earnings were net income and dividends.)

12. Prepare the statement of cash flows for Gibson Industries using direct method. (Amounts to be deducted and cash outflows should be indicated by a minus sign.)

    1. Please answer all and show your work. Drop down menu options are as follows: Interest, inventory purchased,Operating expenses, Paid to purchase equipment, Paid to purchase marketable securities, Payment of dividends, Proceeds from bond issue, Proceeds from preferred stock issue, Proceeds from sale of equipment, Proceeds from sale of land, Proceeds from sale of marketable securities, Proceeds from sale of treasury stock, Repayment of bonds, Repayment of loan,  Sales

       GIBSON INDUSTRIES, INC. Statement of Cash Flows For the Year Ended December 31, Year 3 Cash flows from operating activities:     Cash Receipts from:     drop down menu     drop down menu     Total cash inflows     Cash payments for:     drop down menu     drop down menu     drop down menu           Total cash outflows      drop down menu     Cash flows from investing activities:     drop down menu     drop down menu     drop down menu     drop down menu     drop down menu     drop down menu     drop down menu     Cash flows from financing activities:     drop down menu     drop down menu     drop down menu     drop down menu     drop down menu     drop down menu     drop down menu     drop down menu     drop down menu     drop down menu     drop down menu     Ending cash balance

Answer 1

Cash Flow Statement
Direct Method
Cash flow from Operating Activities
Cash Receipts from
Customers	$     1,032,700		=1051200+85900-104400
Total Cash Inflows		$     1,032,700
Cash Payments for
Inventory	$       -811,600		=-(767500+67300-37600+187400-173000)
Supplies	$         -21,600
Salaries	$         -93,300
Interest	$         -15,200
Total Cash Outflows		$       -941,700
Cash from operating activities		$           91,000
Cash flow from Investing Activities
Sale of Land	$          42,100
Sale of Equipment	$          19,400
Purchase of Equipment	$       -205,000
Sale of Marketable Securities	$          75,400
Purchase of Marketable Securities	$       -112,000
Cash used in investing activities		$       -180,100
Cash flow from Financing Activities
Repaid long term note	$         -21,400
Repayment of Bonds Payable	$       -101,300
Issue of Bonds Payable	$        202,600
Sale of Treasury Shares	$          30,000		=68500-38500
Issue of Common Stock	$          39,900		=241200-201300
Issue of Preferred Stock	$          28,000		=111600+35600-91600-27600
Dividend Paid	$         -48,800		=-(301700+110400-363300)
Cash used in financing activities		$        129,000
Net Increase in cash		$           39,900
Cash balance, prior year		$         121,600
Cash balance, current year		$         161,500