Question

Partially Completed Spreadsheet The following partially completed spreadsheet has been prepared for Perrin Company's 2016 statement of cash flows: Balances Change Worksheet Entries Account Titles 12/31/15 12/31/16 Increase (Decrease) Debit Credit Debits Cash 800 1,540 Noncash Accounts: Accounts Receivable 1,500 2,180 Inventory 3,100 6,055 Investments in Stock — 2,800 Land 6,000 9,200 Buildings 20,000 20,000 Office Equipment 4,000 6,100 Delivery Equipment 3,000 5,900 Treasury Stock — 2,000 Totals 38,400 55,775 ? Credits Accumulated Depreciation 7,000 8,500 Accounts Payable 3,300 3,695 Wages Payable 600 500 Bonds Payable — 5,000 Premium on Bonds Payable — 240 Common Stock, $10 par 6,000 8,200 Additional Paid-in Capital 9,000 13,640 Retained Earnings ? ? 3,500 Totals 38,400 55,775 ? Additional relevant information: Beginning retained earnings $12,500 Plus: Net income 8,000 $20,500 Less: Stock dividends $ 840 Cash dividends 3,660 (4,500) Ending retained earnings $16,000 Accumulated depreciation is a contra account for all the depreciable assets. Depreciation on these assets totaled $2,200 for the year. On January 1, 2016, the company issued 10% bonds with a face value of $5,000 at 106. Interest was paid semiannually on June 30 and December 31. The bonds mature on January 1, 2021. Straight-line amortization is used for bond discount or premium. Bond interest expense was $440. Land was purchased for $3,200 during the year. Two hundred shares of common stock were issued for delivery equipment valued at $2,900 and office equipment valued at $3,100. Twenty shares of stock were issued as a stock dividend. The market price per share was $42. Office equipment with a cost of $1,000 and a book value of $300 was sold for $50. Fifty shares of its own common stock were reacquired by the company as treasury stock. The company purchased the shares for $40 per share. One hundred shares of Doe Company stock were purchased for $28 per share at year-end. Required: Complete the spreadsheet. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments. PERRIN COMPANY Cash Flows Worksheet For Year Ended December 31, 2016 Balances Worksheet Entries Account Titles 12/31/2015 12/31/2016 Change Debit Credit Debits Cash 800 1,540 740 Noncash Accounts: Accounts Receivable 1,500 2,180 680 Inventory 3,100 6,055 2,955 Investments in Stock 2,800 2,800 Land 6,000 9,200 3,200 Buildings 20,000 20,000 Office Equipment 4,000 6,100 2,100 Delivery Equipment 3,000 5,900 2,900 Treasury Stock 2,000 2,000 Totals 38,400 55,775 17,375 Credits Accumulated Depreciation 7,000 8,500 1,500 Accounts Payable 3,300 3,695 395 Wages Payable 600 500 100 Bonds Payable 5,000 5,000 Premium on Bonds Payable 240 240 Common stock, $10 par 6,000 8,200 2,200 Additional Paid-in Capital 9,000 13,640 4,640 Retained Earnings 12,500 16,000 3,500 Totals 38,400 55,775 17,375 Worksheet Entries Debit Credit Cash Flows from Operating Activities: Net income 8,000 Add: Depreciation expense Less: Loss from sale of equipment 250 Cash Flows from Investing Activities: Cash Flows from Financing Activities: Investing and Financing Activities Not Affecting Cash: Acquisition of equipment by issuance of preferred stock Acquisition of equipment by issuance of common stock Net decrease in cash Totals

Answer 1

Cash flow statement for the Year ended Dec.31,2016
Operating activities
Net Income for the Year		8000
Adjustments for non-cash items:
Add:Depreciation for the year	2200
Less:Bond premium amortsn(500-440)	-60
Add: Loss on sale of equipment(300-50)	250	2390
Adjusted net Income		10390
Changes to working capital:
Increase in Accounts receivables(2180-1500)	-680
Increase in Inventory(6055-3100)	-2955
Increase in accounts payable(3300-3695)	395
Decrease in wages payable(500-600)	-100
Net Changes to working capital		-3340
Cash generated from operations		7050
Investing Activities
Purchase of land	-3200
Sale of office equipment	50
Investment in Doe Co. stock	-2800
Cash used in Investing activities		-5950
Financing activities
Proceeds of bond issue(5000*106/100)	5300
Cash dividend	-3660
Treasury stock(50*40)	-2000
Cash used in Financing activities		-360
Net cash generated		740
Beginning cash balance		800
Ending cash balance		1540

	Balances		Change	Worksheet Entries
Account Titles	12/31/2015	12/31/2016	Increase/(Decrease)	Debit	Credit
Debits
Cash	800	1540	740		740
Noncash Accounts:
Accounts Receivables	1500	2180	680		680
Inventory	3100	6055	2955		2955
Investments	0	2800	2800		2800
Land	6000	9200	3200		3200
Buildings	20000	20000	0	0
Office Equipment	4000	6100	2100		2100
Delivery Equipment	3000	5900	2900		2900
Treasury stock	0	2000	2000		2000
Totals	38400	55775	17375
Credits
Accumulated depn.	7000	8500	1500	1500
Accounts payable	3300	3695	395	395
Wages payable	600	500	-100		100
Bonds payable	0	5000	5000	5000
Premium on Bonds payable	0	240	240	240
Common stock,$ 10 par	6000	8200	2200	2200
APIC	9000	13640	4640	4640
Retained Earnings	12500	16000	3500	3500
Totals	38400	55775	17375	17475	17475