Question

The Extra Surplus Company's Balance Sheet for December 31, 2015 and the Income Statement for 2016 are shown below. Extra Surplus Company Balance Sheet December 31, 2015 Assets Cash $ 13,500 Accounts Receivable 6,750 Inventory 16,200 Property and Equipment, Net 27,000 $ 63,450 Liabilities and Stockholders’ Equity Accounts Payable $ 13,500 Notes Payable, Long-Term 6,750 Common Stock 27,000 Retained Earnings 16,200 $ 63,450 Extra Surplus Company Income Statement For the Year Ended December 31, 2016 Sales $ 22,100 Cost of Goods Sold 5,100 Salaries and Wage Expense 5,100 Interest Expense 1,700 Other Expenses 850 Net Income $ 9,350 Additional data: Sales were $22,100; $13,600 in cash was received from customers. Bought new land for cash, $17,000. Sold other land for its book value of $8,500. Paid $1,700 principal on the long-term note payable and $1,700 in interest. Issued new shares of stock for $17,000 cash. Cash dividends of $2,400 were declared and paid to stockholders. Paid $9,700 on accounts payable. No inventory purchases were made; other expenses were incurred on account. All wages were paid in cash. Other expenses were on account. Required: a. Prepare a balance sheet at December 31, 2016. b. Prepare the statement of cash flows using the direct method. (Enter any deductions and cash outflows as a negative value.)

Answer 1

Answer:

Cash flow Statement	Amount($)
Cash flows from operating activities
Cash received from Customers	13,600.00
Cash paid to suppliers	(9,700.00)
Cash paid to employees	(5,100.00)
Cash paid towards Interest	(1,700.00)
Net cash from operating activities	(2,900.00)
Cash flows from investing activities
Sale of Land	8,500.00
Purchase of Land	(17,000.00)
Net cash from investing activities	(8,500.00)
Cash flows from financing activities
Repayment of Long term Notes payable	(1,700.00)
Issue of Common stock	17,000
Payment of Dividend	-2,400
Net cash used in financing activities	12,900.00
Net Increase in cash and cash equivalents	1,500.00
Cash and cash equivalents at beginning of period	13,500.00
Cash and cash equivalents at end of period	15,000.00