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In: Accounting

The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:...

The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:

     Dec. 31, 20Y2      Dec. 31, 20Y1
Assets
Cash $ 841,890 $ 906,790
Accounts receivable (net) 766,120 698,770
Inventories 1,161,810 1,069,200
Prepaid expenses 26,940 31,990
Land 289,610 437,780
Buildings 1,338,610 825,050
Accumulated depreciation-buildings (378,850) (353,590)
Equipment 471,460 416,740
Accumulated depreciation-equipment (129,650) (145,650)
Total assets $4,387,940 $3,887,080
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors) $ 833,710 $ 879,780
Bonds payable 245,720 0
Common stock, $20 par 289,000 107,000
Paid-in capital: Excess of issue price over par-common stock 694,000 512,000
Retained earnings 2,325,510 2,388,300
Total liabilities and stockholders' equity $4,387,940 $3,887,080

The noncurrent asset, noncurrent liability, and stockholders’ equity accounts for 20Y2 are as follows:

ACCOUNT Land ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 437,780
Apr. 20 Realized $137,800 cash from sale 148,170 289,610
ACCOUNT Buildings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 825,050
Apr. 20 Acquired for cash 513,560 1,338,610
ACCOUNT Accumulated Depreciation-Buildings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 353,590
Dec. 31 Depreciation for year 25,260 378,850
ACCOUNT Equipment ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 416,740
Jan. 26 Discarded, no salvage 45,800 370,940
Aug. 11 Purchased for cash 100,520 471,460
ACCOUNT Accumulated Depreciation-Equipment ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 145,650
Jan. 26 Equipment discarded 45,800 99,850
Dec. 31 Depreciation for year 29,800 129,650
ACCOUNT Bonds Payable ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
May 1 Issued 15-year bonds 245,720 245,720
ACCOUNT Common Stock, $20 par ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 107,000
Dec. 7 Issued 9,100 shares of common
stock for $40 per share		 182,000 289,000
ACCOUNT Paid-in Capital in Excess of Par-Common Stock ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 512,000
Dec. 7 Issued 9,100 shares of common
stock for $40 per share		 182,000 694,000
ACCOUNT Retained Earnings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 2,388,300
Dec. 31 Net loss 30,230 2,358,070
Dec. 31 Cash dividends 32,560 2,325,510

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

  1. Whitman Co.
    Statement of Cash Flows
    For the Year Ended December 31, 20Y2
    Cash flows from operating activities:
    Net loss $
    Adjustments to reconcile net loss to net cashflow from operating activities:
    Depreciation
    Loss on sale of land
    Changes in current operating assets and liabilities:
    Increase in accounts receivable
    Increase in inventories
    Decrease in prepaid expenses
    Decrease in accounts payable
    Net cash flow used for operating activities $
    Cash flows from investing activities:
    Cash received from land sold $
    Cash paid for acquisition of building
    Cash paid for purchase of equipment
    Net cash flow used for investing activities
    Cash flows from financing activities:
    Cash received from issuance of bonds payable $
    Cash received from issuance of common stock
    Cash paid for dividends
    Net cash flow from financing activities
    $
    Cash at the beginning of the year
    Cash at the end of the year $

Solutions

Expert Solution

Cash Flow Statement
Cash fows from Operating activities
Net Loss -30230
Adjustment required
Depreciation (29800+25260) 55060
Loss on sale of land (148170-137800) 10370
Change in current assets and liabilities
Increase in Accounts recievable -67350
Increase in Inventories -92610
Decrease in Prepaid expense 5050
Decrease in Accounts payable -46070
Net cash used for operating activities -165780
Cash flows from Investing activities
Sale of land 137800
Cash paid for acquisition of building -513560
Cash paid for purchase of equipment -100520
Net cash used in investing activities -476280
Cash flows from Financing activities
Cash received from Issuance of bonds 245720
Cash received from Issuance of stock 364000
Dividend paid -32560
Net cash flows from financing activities 577160
Net decrease in cash -64900
Beginning balance of cash 906790
Ending balance of cash 841890

ekkarill92 answered 1 year ago
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