A comparative balance sheet for Pearl Corporation is presented below. December 31 Assets 2017 2016 Cash...

A comparative balance sheet for Pearl Corporation is presented below.

	December 31
Assets	2017		2016
Cash	$ 72,800		$ 22,000
Accounts receivable	83,260		67,460
Inventory	181,260		190,460
Land	72,260		111,460
Equipment	261,260		201,460
Accumulated Depreciation-Equipment	(70,260	)	(43,460	)
Total	$600,580		$549,380
Liabilities and Stockholders' Equity
Accounts payable	$ 35,260		$ 48,460
Bonds payable	150,000		200,000
Common stock ($1 par)	214,000		164,000
Retained earnings	201,320		136,920
Total	$600,580		$549,380

Additional information:

1.		Net income for 2017 was $127,520. No gains or losses were recorded in 2017.
2.		Cash dividends of $63,120 were declared and paid.
3.		Bonds payable amounting to $50,000 were retired through issuance of common stock.

Prepare a statement of cash flows for 2017 for Pearl Corporation. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Solutions

Expert Solution

Cash flow statement is prepared as below:

Depreciation for 2017 = Accumulated depreciation for 2017 - Accumulated depreciation for 2016 = $70,260 - $43,460 = $26,800

Equipment purchased during 2017 = $261,260 - $201,460 = $59,800

Land sold during 2017= $111,460 - $72,260 = $39,200

ekkarill92 answered 1 year ago

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