Question

In: Accounting

Prepare the companies statement of cash flows: Income statement: Sales $180,000 Cost of Goods Sold ($110,000)...

Prepare the companies statement of cash flows:

Income statement:

Sales $180,000

Cost of Goods Sold ($110,000)

Depreciation Expense ($30,000)

Operating Expense ($18,000)

Loss on sale of land ($1,000)

Gain on the sale of equipment $5,000

Net income $26,000

Balance Sheet- 2017/2016

Cash- $35,000 (2017)/ $53,000 (2016)

AR- $25,000 / $32,000

Inventory- $40,000 / $32,000

Prepaid Expense- $5,000 / $4,000

Investments- $15,000 / $10,000

Land- $15,000 / $18,000

Build & Equip, net- $145,000 / $122,000

Total Assets- $280,000 / $271,000

Acct. Pay- $18,000 / $13,000

Interest Payable- $17,000 / $25,000

Salaries Payable- $15,000 / $10,000

Notes Payable- $20,000 / $30,000

Bonds Payable- $30,000 / $35,000

Common Stock- $143,000 / $133,000

Retained Earnings- $37,000 / $25,000

Total Liabilities & Equity- $280,000 / $271,000

Additional Information:

- Purchased investments

- Purchased $56,000 of equipment

- Paid off $10,000 of notes payable by issuing common stock

- Paid dividends

- Sold equipment with a book value of $3,000 for a gain of $5,000

- Sold land for a loss of $1,000

Expert Solution

Statement of Cash Flow
Particulars	Amount	Total Amount
Income	26,000.00
Loss on sale of land	1,000.00
Gain on the sale of equipment	(5,000.00)
Depreciation	30,000.00
Decrease in AR	7,000.00
Increase in inventory	(8,000.00)
Increase in prepaid expennse	(1,000.00)
Increase in AP	5,000.00
Decrease in interest payable	(8,000.00)
Increase in Salaries payable	5,000.00
Cash flow from operating activities		52,000.00
Cash flow from Investing activities
Purchase of invt	(5,000.00)
Purchase of Building and equip	(56,000.00)
Sale of equipment	8,000.00
Sale of Land	2,000.00
Cash flow from Investing activities		(51,000.00)
Cash flow from Financing activities
Redemption of bond payable	(5,000.00)
Dividends Paid = 26000 - 12000	(14,000.00)
Cash flow from Financing activities		(19,000.00)
net change in cash and cash equivalents		(18,000.00)
Opening cash and cash equivalents		53,000.00
Closing cash and cash equivalents		35,000.00

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