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The comparative balance sheets for Rothlisberger Company as of December 31 are presented below. Assets 2017...

The comparative balance sheets for Rothlisberger Company as of December 31 are presented below.

Assets 2017 2016
Cash $58,200 $46,000

Accounts Receivable

 $41,100 $63,400
Inventory $148,900 $145,600
Prepaid Expenses $15,000 $27,600
Land $101,900 $133,300
Buildings $200,200 $200,200
Accumulated Depreciation - Buildings $60,300 $33,600
Equipment $228,500 $155,400
Accumulated Depreciation - Equipment $42,600 $36,300
Total $690,900 $701,600
LIABIITIES AND STOCKHOLDERS EQUITY
Accounts Payable $46,000 $39,700
Bonds Payable $260,000 $293,600
Common stock, $1 Par $193,600 $208,300
Retained Earnings $191,300 $208,300
Total $690,900 $701,600

Additional information:

1. Operating expenses include depreciation expense of $42,000 and charges from prepaid expenses of $12,600.
2. Land was sold for cash at book value.
3. Cash dividends of $61,000 were paid.
4. Net income for 2017 was $44,000.
5. Equipment was purchased for $94,900 cash. In addition, equipment costing $21,800 with a book value of $12,800 was sold for $5,900 cash.
6. Bonds were converted at face value by issuing 33,600 shares of $1 par value common stock.


Prepare a statement of cash flows for the year ended December 31, 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).)

Solutions

Expert Solution

Statement of Cash Flows
For the Year Ended December 31, 2017
Cash Flows from Operating Activities:
Net income 44000
Adjustments to reconcile net income to
Net cash provided by operating activities
Depreciation expense 42000
Loss on Sale of Equipment 6900
Decrease in Accounts receivables 22300
Increase in inventory -3300
Increase in accounts payable 6300
Decrease in prepaid expenses 12600
86800
Net cash provided by operating activities 130800
Cash Flows from Investing Activities:
Purchase of Equipment -94900
Sale of Equipment 5900
Sale of Land 31400
Net Cash used by Investing Activities -57600
Cash Flows from Financing Activities
Payment of Cash Dividends -61000
Net Cash Used by Financing Activities -61000
Net Increase in Cash 12200
Cash at Beginning of Period 46000
Cash at End of Period 58200
Noncash Investing and Financing Activities
Redemption of bonds by Issuance of Common Stock 33600

ekkarill92 answered 1 year ago
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