Question

              Perry Magic Shoppe had the following condensed balance sheet at the end of operation for    2017:

Perry Magic Shoppe

Balance Sheet

December 31, 2017

Cash	$30,000		Current Liabilities	$25,000
Other current assets	60,000		Long-term Notes Payable	38,000
Total current assets	$90,000		Bonds Payable	50,000
Investments	$25,000		Capital Stock	147,000
Fixed assest (net)	90,000		Retained earnings	65,000
Land	$120,000
Total assets	$325,000		Total Liabilities and Equity	$325,000

During 2018, the following occurred

1. Perry sold some of its investments for $12,300 which resulted in a gain of $300 after taxes. The gain (net of taxes) has been included in the company’s 2018 net income.
2. Additional land for a plant expansion was purchased for $22,000.
3. Bonds payable were paid in the amount of $8,500.
4. An additional $25,000 in capital stock was issued.
5. Dividends of $13,000 were paid to stockholders.
6. Net income for 2008 was $38,000.
7.    $11,000 is the depreciation expense.
8. A second Peace of land was purchased through the issuance of $10,000 in bonds, and $4,800 in long-term notes payable.

Required:

1. Prepare a statement of cash flows for the year ended 12/31/2018.
2. Prepare a balance sheet for Perry at December 31, 2018.

Answer 1

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