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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

Particulars Working $ $
Net Income 18750-9000 9750
Cash by operating activities
Loss on Sale of equipment Adj no 3: 2500 Selling Price - (Cost 11000-Depreciation 40%) 4100
Gain on Building Damage Adj no 2: Insurance 30000-( Cost 29750-Depreciation 6000) -6250
Gain on Sale of Investment Adj No 1: 1700 above cost -1700
Increase in Accounts Receivable -2250
Increase in Accounts Payable 2000
Increase in Inventory -3000
Depreciation Exp Dep on sold equipment 4400-decrease in dep2500 1900
Patent Amortization 4250 -950
8800
Cash by Investing activities
Sale of Investment 4700
Sale of Equipment 2500
Purchase of Equipment Working below -23000
Proceed from Insurance for flood damage 30000 14200
Cash by Financing activities
Payment of Dividend 5000-1000 -4000
Payment of Short Ternm Note paybale 8500-4000 -3500
Cash from Common Stock 5000 -2500
Increase in cash 33500-13000 20500
working:
Opening Balnce of Equipment 20000
Cost of Sold Equipment -11000
Pur of equipment with note 13000 (Increase in note balance)
Balance 22000
Closing Balance 45000
Cash Purchase 23000

Equipment Purchased by Note payable 13000

ekkarill92 answered 1 year ago
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