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In: Accounting

Boatwig, Corp. Balance Sheet December 31, 2013 and December 31, 2014 2013 Dr. Cr. 2014 Assets...

Boatwig, Corp.
Balance Sheet
December 31, 2013 and December 31, 2014
2013 Dr. Cr. 2014
Assets
Cash $19,000 $71,000
Accounts Receivable                 66,000                 84,000
Inventory               185,000               184,000
Land               113,000                 67,000
Equipment               195,000               256,000
Accummulated Depreciation                (42,000)                (69,000)
Total $536,000 $593,000
Liabilities and Stockholders' Equity
Accounts Payable $44,000 $36,000
Bonds Payable               198,000               143,000
Common Stock               167,000               222,000
Retained Earnings               127,000               192,000
Total $536,000                         -                           -   $593,000
Additional Information:
1. Net income for 2014 $125,000
2. No gains or losses were recorded in 2014
3. Cash dividends declared and paid $60,000
4. Bonds payable retired by issuing common stock $55,000
In the space below, prepare a Statement of Cash Flows for the year ended December 31, 2014:
Use the worksheet (above) to aid your work if you like…. I will grade the resulting cash flow statement (below) only.

Solutions

Expert Solution

BOATWIG, CORP.
Statement of Cash Flows (Indirect Method)
For Year Ended December 31, 2014
Cash Flows from Operating Activities
Net income 125000
Adjustments to reconcile net income to net cash provided by operating activities
Depreciation expense 27000
Changes in current operating assets and liabilities
Increase in Accounts Receivable -18000
Decrease in Inventory 1000
Decrease in Accounts payable -8000 2000
Net cash provided by operating activities 127000
Cash Flows from Investing Activities
Cash paid for equipment purchase -61000
Cash received from sale of land 46000
Net cash used in investing activities -15000
Cash Flows from Financing Activities
Cash paid for dividends -60000
Net cash used in financing activities -60000
Net increase (decrease) in cash 52000
Cash balance, December 31, 2013 19000
Cash balance, December 31, 2014 71000

Note: Bonds payable retired by issuing common stock is not included in the cash flow statement since it does not involve any cash flow and is an intra-financing activity.


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