Question 4 Martinez Inc., had the following condensed balance sheet at the end of operations for...

Question 4

Martinez Inc., had the following condensed balance sheet at the end of operations for 2016.

MARTINEZ INC. BALANCE SHEET DECEMBER 31, 2016
Cash	$8,500	Current liabilities	$14,800
Current assets other than cash	29,000	Long-term notes payable	25,800
Equity invesments	20,200	Bonds payable	25,000
Plant assets (net)	67,400	Common stock	75,000
Land	40,100	Retained earnings	24,600
	$165,200		$165,200

During 2017, the following occurred.

1.		A tract of land was purchased for $9,000.
2.		Bonds payable in the amount of $15,000 were redeemed at par.
3.		An additional $10,100 in common stock was issued at par.
4.		Dividends totaling $9,400 were paid to stockholders.
5.		Net income was $30,500 after allowing depreciation of $13,400.
6.		Land was purchased through the issuance of $22,500 in bonds.
7.		Martinez Inc. sold part of its investment portfolio for $12,900. This transaction resulted in a gain of $2,000 for the company. No unrealized gains or losses were recorded on these investments in 2017.
8.		Both current assets (other than cash) and current liabilities remained at the same amount.

(a) Prepare a statement of cash flows for 2017 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).

(b) Prepare the condensed balance sheet for Martinez Inc. as it would appear at December 31, 2017. (List current assets in the order of Liquidity.)

Expert Solution

ekkarill92 answered 1 year ago

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