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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 $ 818,950 $ 884,200
Accounts receivable (net) 745,240 679,730
Inventories 1,130,150 1,040,070
Prepaid expenses 26,210 31,120
Land 281,720 425,850
Buildings 1,302,130 802,570
Accumulated depreciation-buildings (368,530) (343,960)
Equipment 458,610 405,380
Accumulated depreciation-equipment (126,120) (141,680)
Total assets $4,268,360 $3,783,280
Liabilities and Stockholders' Equity
Accounts payable (merchandise creditors) $ 810,990 $ 855,800
Bonds payable 239,030 0
Common stock, $20 par 280,000 104,000
Paid-in capital: Excess of issue price over par-common stock 674,000 498,000
Retained earnings 2,264,340 2,325,480
Total liabilities and stockholders' equity $4,268,360 $3,783,280

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 425,850
Apr. 20 Realized $134,000 cash from sale 144,130 281,720
ACCOUNT Buildings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 802,570
Apr. 20 Acquired for cash 499,560 1,302,130
ACCOUNT Accumulated Depreciation-Buildings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 343,960
Dec. 31 Depreciation for year 24,570 368,530
ACCOUNT Equipment ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 405,380
Jan. 26 Discarded, no salvage 44,600 360,780
Aug. 11 Purchased for cash 97,830 458,610
ACCOUNT Accumulated Depreciation-Equipment ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 141,680
Jan. 26 Equipment discarded 44,600 97,080
Dec. 31 Depreciation for year 29,040 126,120
ACCOUNT Bonds Payable ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
May 1 Issued 20-year bonds 239,030 239,030
ACCOUNT Common Stock, $20 par ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 104,000
Dec. 7 Issued 8,800 shares of common
stock for $40 per share		 176,000 280,000
ACCOUNT Paid-in Capital in Excess of Par-Common Stock ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 498,000
Dec. 7 Issued 8,800 shares of common
stock for $40 per share		 176,000 674,000
ACCOUNT Retained Earnings ACCOUNT NO.
Balance
Date Item Debit Credit Debit Credit
20Y2
Jan. 1 Balance 2,325,480
Dec. 31 Net loss 29,440 2,296,040
Dec. 31 Cash dividends 31,700 2,264,340

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.

Whitman Co.
Statement of Cash Flows
For the Year Ended December 31, 20Y2
Cash flows from operating activities:
$
Adjustments to reconcile net loss to net cashflow from operating activities:
Changes in current operating assets and liabilities:
Net cash flow used for operating activities $
Cash flows from investing activities:
$
Net cash flow used for investing activities
Cash flows from financing activities:
$
Net cash flow from financing activities
$
Cash at the beginning of the year
Cash at the end of the year $

Solutions

Expert Solution

WHITMAN CO.
Statement of Cash Flows
For the Year Ended December 31, 20Y2
Cash flows from operating activities:
Net loss ($29,440)
Adjustments to reconcile net loss to
net cash flow from operating activities:
Depreciation* 53,610
Loss on sale of land** 10,130
Changes in current operating assets
and liabilities:
Increase in accounts receivable -65,510
Increase in inventories -90,080
Decrease in prepaid expenses 4,910
Decrease in accounts payable -44,810
Net cash flow used for operating activities ($161,190)
Cash flows from investing activities:
Cash received from land sold $134,000
Less: Cash paid for acquisition
of building $499,560
Cash paid for purchase
of equipment 97,830 597,390
Net cash flow used for investing activities -463,390
activities
Cash flows from financing activities:
Cash received from issuance of
bonds payable $239,030
Cash received from issuance of
common stock 352,000 $591,030
Less cash paid for dividends 31,700
Net cash flow from financing activities 559,330
Decrease in cash -65,250
Cash at the beginning of the year 884200
Cash at the end of the year 818,950
* $24,570 + $29,040
** $134,000 – $144,130
     Dec. 31, 20Y2      Dec. 31, 20Y1 +/-
Assets
Cash $818,950 $884,200 ($65,250)
Accounts receivable (net) 745,240 679,730 $65,510
Inventories 1,130,150 1,040,070 $90,080
Prepaid expenses 26,210 31,120 ($4,910)
Land 281,720 425,850 ($144,130)
Buildings 1,302,130 802,570 $499,560
Accumulated depreciation-buildings -368,530 -343,960 ($24,570)
Equipment 458,610 405,380 $53,230
Accumulated depreciation-equipment -126,120 -141,680 $15,560
Total assets $4,268,360 $3,783,280 $485,080
Liabilities and Stockholders' Equity $0
Accounts payable (merchandise creditors) $810,990 $855,800 ($44,810)
Bonds payable 239,030 0 $239,030
Common stock, $20 par 280,000 104,000 $176,000
Paid-in capital: Excess of issue price over par-common stock 674,000 498,000 $176,000
Retained earnings 2,264,340 2,325,480 ($61,140)
Total liabilities and stockholders' equity $4,268,360 $3,783,280 $485,080

ekkarill92 answered 1 year ago
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