Question
In: Accounting
Problem 15-8 Baskin Company's net income last year was $98,000. Changes in the company's balance sheet...
Problem 15-8
Baskin Company's net income last year was $98,000. Changes in the company's balance sheet accounts for the year appear below:
| Increases (Decreases) |
||
| Debit balances: | ||
| Cash | $24,000 | |
| Accounts receivable | 15,000 | |
| Inventory | (18,000) | |
| Prepaid expenses | (6,000) | |
| Long-term investments | 10,000 | |
| Plant and equipment | 40,000 | |
| Credit balances: | ||
| Accumulated depreciation | 32,000 | |
| Accounts payable | (14,000) | |
| Accrued liabilities | 11,000 | |
| Taxes payable | 4,000 | |
| Bonds payable | (40,000) | |
| Common stock | 10,000 | |
| Retained earnings | 62,000 | |
The company declared and paid cash dividends of $36,000 last year.
Required:
A. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.) Amounts to be deducted should be indicated by a minus sign.
| Baskin Company | |
| Operating Activities Section | |
| Net income | $ |
| Add (deduct) adjusting items: | |
| Net cash flows from operating activities | $ |
B. Prepare the investing activities section of the company's statement of cash flows for the year. Amounts to be deducted should be indicated by a minus sign.
| Baskin Company | |
| Investing Activities Section | |
| $ | |
| Net cash flows from investing activities | $ |
C. Prepare the financing activities section of the company's statement of cash flows for the year. Amounts to be deducted should be indicated by a minus sign.
| Baskin Company | |
| Financing Activities Section | |
| $ | |
| Net cash flows from financing activities | |
Solutions
Expert Solution
A. Prepare the operating activities section of the company's statement of cash flows for the year. (Use the indirect method.) Amounts to be deducted should be indicated by a minus sign.
| Baskin Company | |
| Operating Activities Section | |
| Net income | $98000 |
| Add (deduct) adjusting items: | |
| Depreciation expense | 32000 |
| Increase account receivable | -15000 |
| Decrease inventory | 18000 |
| Decrease prepaid expense | 6000 |
| Decrease account payable | -14000 |
| Increase accrued liabilities | 11000 |
| Increase income tax payable | 4000 |
| Net cash flows from operating activities | $140000 |
B. Prepare the investing activities section of the company's statement of cash flows for the year. Amounts to be deducted should be indicated by a minus sign.
| Baskin Company | |
| Investing Activities Section | |
| Purchase long term lnvestment | -10000 |
| Purchase property, plant and equipment | -40000 |
| Net cash flows from investing activities | -50000 |
C. Prepare the financing activities section of the company's statement of cash flows for the year. Amounts to be deducted should be indicated by a minus sign.
| Baskin Company | |
| Financing Activities Section | |
| Repaid bonds payable | -40000 |
| Issue common Stock | 10000 |
| Dividend paid | -36000 |
| Net cash flows from financing activities | -66000 |
ekkarill92 answered 1 year agoRelated Solutions
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Long-term investments
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Increases
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Asset and Contra-Asset
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Inventory
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Prepaid expenses
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Long-term investments
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The net changes in the balance sheet accounts of KMD, Inc. for the year 2018 are...
The net changes in the balance sheet accounts of KMD,
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Debit
Credit
Cash
$ 130,000
Accounts
receivable
$ 14,000
Allowance for doubtful
accounts
4,000
Inventory
80,000
Prepaid
expenses
10,000
Held-to-Maturity
Securities
100,000
Available-for-Sale
Securities
300,000
Equipment
700,000
Accumulated depreciation:
Equipment
0
0
Goodwill
10,000
Accounts
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105,000
Notes
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325,000
Common
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100,000
Additional paid-in
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_________
450,000
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Accounts receivable
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Allowance for doubtful accounts
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Inventory
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Prepaid expenses
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