Question

In: Accounting

Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2. Swasey...

Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2.

Swasey Company

Comparative Balance Sheets

At December 31, 20X1 and 20X2

1

20X1

20X2

2

Current assets:

3

Cash

$210,500.00

$645,500.00

4

Accounts receivable

$750,000.00

$583,000.00

5

Inventories

301,000.00

317,000.00

6

Long-term assets:

7

Plant and equipment

2,209,000.00

2,142,000.00

8

Accumulated depreciation

(1,193,000.00)

(1,257,000.00)

9

Land

998,000.00

1,444,500.00

10

Total assets

$3,275,500.00

$3,875,000.00

11

Current liabilities:

12

Wages payable

$699,000.00

$514,000.00

13

Long-term liabilities:

14

Bonds payable

0.00

387,000.00

15

Mortgage payable

104,500.00

0.00

16

Total liabilities

$803,500.00

$901,000.00

17

Stockholders’ equity:

18

Common stock

373,000.00

373,000.00

19

Paid-in capital in excess of par

275,000.00

275,000.00

20

Retained earnings

1,824,000.00

2,326,000.00

21

Total stockholders’ equity

2,472,000.00

2,974,000.00

22

Total liabilities and stockholders’ equity

$3,275,500.00

$3,875,000.00

Swasey Company

Income Statement

For the Year Ended December 31, 20X2

1

Revenues

$3,008,000.00

2

Gain on sale of equipment

104,000.00

3

Cost of goods sold

(1,915,000.00)

4

Depreciation expense

(272,000.00)

5

Interest expense

(13,000.00)

6

Net income

$912,000.00

During the year, Swasey Company sold equipment with a book value of $276,500 for $380,500 (original purchase cost of $484,500). New equipment was purchased.

Required:
1. Prepare a statement of cash flows for Swasey for 20X2.
2. Reflect on the relationship between the statement of cash flows and the change in cash.

Refer to the list below for the exact wording of a label or an amount description within your Statement of Cash Flows.

Amount Descriptions
Add cost of goods sold
Add interest expense
Decrease in accounts receivable
Decrease in wages payable
Decrease in inventories
Depreciation expense
Gain on sale of equipment
Increase in accounts receivable
Increase in wages payable
Increase in inventories
Issuance of bonds payable
Loss on sale of equipment
Net cash from financing activities
Net cash from investing activities
Net cash from operating activities
Net decrease in cash
Net income
Net increase in cash
Net loss
Payment of dividends
Payment of mortgage
Purchase of equipment
Purchase of land
Receipt of dividends
Sale of equipment  

1. Prepare a statement of cash flows for Swasey for 20X2. (Note: Use a minus sign to indicate any decreases in cash or cash outflows. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.)

Swasey Company

Statement of Cash Flows

For the Year Ended December 31, 20X2

1 Cash flows from operating activities:      
2
3

Add (deduct) adjusting items:

4
5
6
7
8
9
10 Cash flows from investing activities:
11
12
13
14
15 Cash flows from financing activities:
16
17
18
19
20

2. Complete the statement below regarding the relationship between the statement of cash flows and the change in cash.

The sum of the (operating and investing) or (operating,investing, and financing) or (investing and operating) or (operating and financing) cash flows must equal the change in (cash flow) or (net income) or (cash account).

.

Solutions

Expert Solution

Statement of cash flows
Cash flows from Operating activities
Net Income for the year 912000
Ajdustment
Depreciation 272000
Gain on sale of equipment -104000
Decease in accounts receivable 167000
Increase in inventries -16000
Decrease in wages payable -185000
Net cash provided from operating 1046000
Cash flows form investing activities:
sale of equipment 380500
Purchase of equipment (=2209000-484500-2142000) -417500
Purchase of land -446500
Net csh used in investing activities -483500
Cash flows from financing activities:
Issue of bonds 387000
Mortgage repaid -104500
Dividend paid (1824000+912000-2326000) -410000
Net cash used n financing activities -127500
Net cash increase 435000
Add: Beginning balance 210500
Ending balance 645500
The Sum of Operating or investing or financing activities cash flows must equal the c hange n cash flows

Related Solutions

Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2. Swasey...
Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2. Swasey Company Partial Comparative Balance Sheets At December 31, 20X1 and 20X2 1 20X1 20X2 2 Current Assets 3 Accounts receivable 745,000.00 677,000.00 4 Inventories 295,000.00 315,000.00 5 Current liabilities 6 Wages payable 705,000.00 680,000.00 Swasey Company Income Statement For the Year Ended December 31, 20X2 1 Revenues 3,120,000.00 2 Gain on sale of equipment 100,000.00 3 Cost of goods sold (1,910,000.00) 4 Depreciation expense...
Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2. Swasey...
Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2. Swasey Company Comparative Balance Sheets At December 31, 20X1 and 20X2 1 20X1 20X2 2 Current assets: 3 Cash $235,500.00 $675,000.00 4 Accounts receivable $753,000.00 $586,500.00 5 Inventories 303,000.00 316,000.00 6 Long-term assets: 7 Plant and equipment 2,193,000.00 2,151,000.00 8 Accumulated depreciation (1,201,000.00) (1,291,000.00) 9 Land 992,000.00 1,443,500.00 10 Total assets $3,275,500.00 $3,881,000.00 11 Current liabilities: 12 Wages payable $700,000.00 $511,000.00 13 Long-term liabilities: 14...
Tidwell Company has provided the following partial comparative balance sheets and the income statement for 20X2....
Tidwell Company has provided the following partial comparative balance sheets and the income statement for 20X2. Tidwell Company Comparative Balance Sheets At December 31, 20X1 and 20X2 1 20X1 20X2 2 Current assets: 3 Accounts receivable $346,000.00 $284,000.00 4 Inventories 122,000.00 147,000.00 5 Current liabilities: 6 Accounts payable 302,000.00 239,500.00 Tidwell Company Income Statement For the Year Ended December 31, 20X2 1 Revenues $1,204,000.00 2 Gain on sale of equipment 49,000.00 3 Cost of goods sold (655,000.00) 4 Depreciation expense...
Blaylock Company provided the following partial comparative balance sheets and the income statement for 2016. Blaylock...
Blaylock Company provided the following partial comparative balance sheets and the income statement for 2016. Blaylock Company Comparative Balance Sheets At December 31, 2015 and 2016 1 2015 2016 2 Current assets: 3 Accounts receivable $750,000.00 $582,500.00 4 Inventories 300,000.00 320,000.00 5 Long-term assets: 6 Plant and equipment 2,200,000.00 2,150,000.00 7 Accumulated depreciation (1,200,000.00) (1,270,000.00) 8 Land 1,000,000.00 1,437,500.00 9 Current liabilities: 10 Wages payable $700,000.00 $515,000.00 11 Long-term liabilities: 12 Bonds payable 0.00 385,000.00 13 Mortgage payable 100,000.00 0.00...
Back Cove Company has the following comparative balance sheets and income statement:                             &
Back Cove Company has the following comparative balance sheets and income statement:                                                       2017                                          2016 Cash                                           $10,000                                   $15,000 Receivables 11,000                                      10,000 Inventories 22,000                                      18,000 Other Assets (net) 20,000                                      30,000                                                       $63,000                                   $73,000 Accounts Payable $10,000 $20,000 Capital Stock $20,000 16,000 Retained Earnings 33,000 37,000 $63,000                                   $73,000 Sales                                                                              $110,000 Cost of Sales 72,000 Gain on sale of Assets 2,000 Expenses 16,000 Income $ 24,000 Depreciation expense was $5,000.   A machine with a cost of $19,000 and book value...
Back Cove Company has the following comparative balance sheets and income statement:                             &
Back Cove Company has the following comparative balance sheets and income statement:                                                 2017                                       2016 Cash                                      $10,000                                 $15,000 Receivables                           11,000                                   10,000 Inventories                            22,000                                   18,000 Other Assets (net)              20,000                                   30,000                                                 $63,000                                 $73,000 Accounts Payable             $10,000                                 $20,000 Capital Stock                      $20,000                                 16,000 Retained Earnings            33,000                                 37,000                                                 $63,000                                 $73,000 Sales                                                                      $110,000 Cost of Sales                                                           72,000 Gain on sale of Assets                                          2,000 Expenses                                                                 16,000 Income                                                                 $ 24,000 Depreciation expense was $5,000 (included in...
Comparative balance sheets: 2019 and 2020, an income statement for 2020 are provided below for Dandelion’s...
Comparative balance sheets: 2019 and 2020, an income statement for 2020 are provided below for Dandelion’s shop. Balance Sheet As of December 31st Assets 2020 2019 Cash $1,550 $1,100 Account Receivable 550 1,200 Inventory 1,800 1,300 Investment – Trading Securities 970 970     Fair Value Adjustment 70 0 Property Plant & Equipment 12,000 10,800    Accumulated Depreciation – PPE (4,650) (5,400) Goodwill $400 $600          Total Assets $12,690 $10,570 Liabilities Accounts Payable $200 $550 Accrued Wages 800 220 Convertible Bonds...
The comparative balance sheets and an income statement for Raceway Corporation follow. Balance Sheets As of...
The comparative balance sheets and an income statement for Raceway Corporation follow. Balance Sheets As of December 31 Year 2 Year 1 Assets Cash $ 71,084 $ 41,770 Accounts receivable 30,368 22,270 Merchandise inventory 156,692 172,360 Prepaid rent 2,460 4,920 Equipment 260,140 287,240 Accumulated depreciation (148,440 ) (239,840 ) Land 192,720 80,320 Total assets $ 565,024 $ 369,040 Liabilities Accounts payable (inventory) $ 61,746 70,040 Salaries payable 33,367 28,600 Stockholders’ equity Common stock, $50 par value 251,500 198,500 Retained earnings...
The following income statement and balance sheets for Laser World are provided: LASER WORLD Income Statement...
The following income statement and balance sheets for Laser World are provided: LASER WORLD Income Statement For the year-ended December 31, 2021 LASER WORLD Income Statement For the year-ended December 31, 2021 Sales revenue $ 2,280,000 Cost of goods sold 1,560,000 Gross profit 720,000 Expenses: Operating expenses 347,000 Depreciation expense 68,000 Loss on sale of land 4,900 Interest expense 21,000 Income tax expense 55,000 Total expenses 495,900 Net income $ 224,100 LASER WORLD Balance Sheet December 31 2021 2020 Assets...
Pandemic Inc. provided the following comparative balance sheets for 2020 and 2019 and the 2020 income...
Pandemic Inc. provided the following comparative balance sheets for 2020 and 2019 and the 2020 income statement. Additional pertinent information is provided below. - Fixed assets costing $8,000 with a book value of $3,000 were sold for $6,000. - Long term investments costing $5,000 were sold for $5,000. -Redeemed $5,000 of the bond issuance. - Sold stock___________. -Paid dividends_________. All other transactions involved cash. Be certain you have accounted for all the changes in the account line items somewhere in...
ADVERTISEMENT
ADVERTISEMENT
ADVERTISEMENT