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23-2. December 31 2017                         2016 33,500              &nb

23-2. December 31

2017                         2016

33,500                         13,000 Cash

12,250                         10,000 Accounts Receivable

12,000                         9,000 Inventory

0                                  3,000 Long-Investments

0                                  29,750 Building

0                                  (6,000) Accumalted depreciation on building

45,000                         20,000 Equipment

(2,000)                        (4,500) Accumlated depreciation on equipment

5,000                           9,250 Patents

105,750                       83,500 Total Assets

5,000                           3,000 Accounts Payable

1,000                           5,000 Dividends Payable

4,000                           8,500 Short-term Notes Payables

32,000                         25,000 Long term notes payable

39,000                         30,000 Common stock

6,000                            3,000 Pain-in capital excess of par

18,750                         9,000 Retained Earnings

105,750                       83,500 Total

Additional data related to 2017 are as follows:

1. Long-term investments were sold at 1,700 above their cost.

2. On January 1, 2017 the building was completely destroyed by a flood. Insurance proceeds on the building were $30,000.

3. Equipment that had cost 11,000 and was 40% depreciated was sold for 2,500.

4. Common stock with a par value of 5,000 and a market value of 6,000 was issued to pay off part of the long-term note.

5. A new long-term note was issued for the acquisition of equipment.

6. Equipment was purchased for cash.

7. Dividends were of 7,000 were declared during 2017.

Prepare the statement of cash flows, including any significant non-cash transactions after the reconciliation. (SHOW ALL OF YOUR WORK PLEASE)

Solutions

Expert Solution

Statement of cash flow
Cash flows from operating activities
Net Income 18750-(9000-7000 dividend) 16750
Adjustments to convert net income to cash basis
Depreciation expenses   2000-(4500-(11000*40%)) 1900
Amortization expenses 4250
Loss on sale of equipment 2500-(11000-4400) 4100
Gain on sale of long term investment -1700
Gain on flood damage 30000-(29750-6000) -5750
Increase in Accounts receivable -2250
Increase in Inventories (20000-11000) -3000
Increase in Accounts Payable 2000
-450
Net cash from operating activities     16,300.00
Cash flows from investing activities
Procees from Flood damage $30,000
Sale of long term invetsments $4,700
Sale of equipment 2500
Purchase of equipment ($23,000) 14200
Net cash used investing activities     14,200.00
Cash flows from financing activities
Purchase of Treasury Stock
Issue of Common stock 39000+6000-(30000+3000+6000) 6000
Repayment ofShort term Notes payable -4500
Payment of dividend 1000-(5000+7000) -11000      (9,500.00)
Net cash from financing activities     (9,500.00)
Net Increase in cash and cash equivalents 21,000.00
Cash and cash equivalents at beginning of period 13,000.00
Ending Balance       34,000.00
Non cash transaction
Long term notes payable of $7000 was issued for acqusition of equipment
Issue of common stock for $6000 to pay off long term note
working
Purchase of equipment for cash
Ending Balance $45,000
Less: Beginning balance-cost of asset sold (20000-11000) -9000
Less: Long term Notes payable issued 32000-(25000-6000) -13000
Purchase of equipment for cash $23,000

ekkarill92 answered 1 year ago
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