Question

Below is the comparative balance sheet for Crane Corporation.

		Dec. 31, 2017			Dec. 31, 2016
Cash		$16,500			$20,800
Short-term investments		25,000			18,900
Accounts receivable		43,200			44,600
Allowance for doubtful accounts		(1,800	)		(1,900	)
Prepaid expenses		4,100			2,500
Inventory		81,700			65,500
Land		49,500			49,500
Buildings		125,000			73,100
Accumulated depreciation—buildings		(30,000	)		(22,800	)
Equipment		52,800			46,200
Accumulated depreciation—equipment		(19,100	)		(15,500	)
Delivery equipment		39,400			39,400
Accumulated depreciation—delivery equipment		(22,000	)		(20,500	)
Patents		14,900			–0–
		$379,200			$299,800
Accounts payable		$26,000			$16,200
Short-term notes payable (trade)		3,900			6,100
Accrued payables		3,000			4,600
Mortgage payable		72,900			53,100
Bonds payable		49,500			62,400
Common stock		138,700			102,600
Paid-in capital in excess of par		10,100			4,000
Retained earnings		75,100			50,800
		$379,200			$299,800

Dividends in the amount of $15,000 were declared and paid in 2017.

From this information, prepare a worksheet for a statement of cash flows. Make reasonable assumptions as appropriate. The short-term investments are considered available-for-sale and no unrealized gains or losses have occurred on these securities.

Answer 1

Crane Corporation
Cash Flow Statement
For the year ended December 31, 2017
Cash flows from operating activities
Net Income		$   39,300	75100-50800+15000
Adjustment to reconcile net income to:
Depreciation expense	$   12,300		30000-22800+19100-15500+22000-20500
Decrease in accounts receivable	$      1,300		44600-43200-1900+1800
Increase in inventory	$ (16,200)		65500-81700
Increase in prepaid expenses	$   (1,600)		2500-4100
Increase in accounts payable	$      9,800		26000-16200
Decrease in accrued payable	$   (1,600)		28000-25000
		$      4,000
Net cash flow from operating activities		$   43,300
Cash flows from investing activities
Cash paid for acqistion of short term investments	$   (6,100)		18900-25000
Cash paid for Purchase of building	$ (51,900)		73100-125000
Cash paid for Purchase of equipment	$   (6,600)		46200-52800
Cash paid for acquistion of patent	$ (14,900)
Net cash used for investing activities		$ (79,500)
Cash flows from financing activities
Cash received from issuance of common stock	$   42,200		138700-102600+10100-4000
Cash paid for dividend	$ (15,000)
Repayment of short term notes	$   (2,200)		3900-6100
Cash from mortgage borrowings	$   19,800		72900-53100
Repayment of bonds	$ (12,900)		49500-62400
Net cash flow from financing activities		$   31,900
Net increase in cash and cash equivalents		$   (4,300)
Cash and cash equivalents at beginning of period		$   20,800
Cash and cash equivalents at end of period		$   16,500