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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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