Questions
Complete the following questions. In addition to answering the items below, you must submit an analysis...

Complete the following questions. In addition to answering the items below, you must submit an analysis of the assignment. Analyze the specific outcomes and analysis directed toward the management team at Smart Company describing what the numbers mean and how they relate to the business. Submit journal entries in an Excel file and written segments in an MS Word document. For written answers, please make sure your responses are well-written, formatted per CSU-Global Guide to Writing and APA and have proper citations, where applicable.

You are the accountant for Smart Construction Company, a large construction company in Colorado. You have been presented with the following
financial information for Smart and asked to prepare the Statement of Cash Flows for the year ended June 30, 2017. You will complete all work for

the project in this excel file, which includes the following tabs:

I have inputted some information in hopes that I can recieve correction in my entries. I also hope it clarifies what I am asking.

This is the formatt the course gave.
1. Facts - Information taken from Smart's accounting records and additional information regarding the cash flows as of June 30, 2017.
2. Worksheet - Worksheet template (also see Example 21.3a in text).

3. Cash Flows - Statement of Cash Flows template (also see Example 21.3b in text).

Account Balances
30-Jun-16 30-Jun-17
Debits
Cash $361,700 $880,550
Accounts Receivable 100,000 125,000
Marketable Securities (at cost) 11,700 13,000
Allowance for Change in Value 1,500 1,800
Construction in Process 168,750 405,000
Prepaid Expenses 45,000 10,000
Investments (long-term) -    13,500
Leased Equipment -    20,000
Building 30,000 -   
Deferred tax asset 5,375 2,200
Land 10,500 10,500
Discount on Bonds Payable -    1,305
Totals 734,525 1,482,855
Credits
Allowance for doubtful accounts $6,000 $4,500
Accounts Payable 87,500 210,000
Deferred tax liability 1,000 3,300
Income Taxes Payable 3,500 9,000
Note Payable (long-term) 3,500 -   
Accumulated Depreciation on Building 2,500 -   
Accumulated Depreciation on Leased Asset -    3,000
Lease obligation -    18,000
Interest payable on lease obligation -    1,800
Interest payable (Bonds) -    1,800
Bonds payable -    45,000
Billings on contruction in process 150,000 325,000
Pension liability 150,000 400,000
Convertible preferred stock, $100 par 9,000 -   
Common Stock, $10 par 14,000 24,500
Additional Paid-in Capital 8,700 13,700
Unrealized Increase in Value of Marketable Securities 1,500 1,800
Retained Earnings 297,325 421,455
Totals 734,525 1,482,855
Additional information:
a. Dividends declared and paid totaled $650.
b. 300 shares of common stock (at par) were issued for cash.
c. On July 1, 2016, convertible preferred stock that had originally been issued at par value were
converted into 500 shares of common stock. The book value method was used to account for the
conversion.
d. The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the
fiscal year.
e. Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by
$300 to a $14,800 fair value at year-end by adjusting the related allowance account.
f. During the year, a 30% interest in Ricochet Co. was purchased as an investment for $9,500. Ricochet
reported $20,000 in net income for the year and paid dividends of $2,000 to Smart.
g. $5,000 of accounts receivable were written off as uncollectible during the year.
h. Smart’s inventory consists of Construction-in-Process in excess of the Billings on
Construction-in-Process account balance.
i. A building was destroyed by fire during the year and insurance proceeds of $26,000 were collected.
j. The 12% bonds payable were issued on February 28, 2017, at 97. They mature on February 28, 2027.
The company uses the straight-line method to amortize bond premiums and discounts.
k. Smart recorded pension expense of $350,000 for the year.
l. A lease agreement was signed on July 1st, 2016 for the use of equipment worth $20,000. The

company determined that the transaction should be recorded as a capital lease.
SMART CONSTRUCTION COMPANY
Cash Flows Worksheet
For Year Ended June 30, 2017
Balances Change Worksheet Entries
Account Titles 6/30/2016 6/30/2017 Increase (Decrease) Debit Credit Credit
Debits
Cash 361,700 880,550 518,850
Noncash Accounts:
Accounts Receivable 100,000 125,000 25,000
Marketable Securities (at Cost) 11,700 13,000 1300
Allowance for change in value 1,500 1,800 300
Construction in Process 168,750 405,000 236,250
Prepaid Expenses 45,000 10,000 -35,000
Investment ( Long-Term) 13,500 13,500
Leased Equipment 20,000 20,000
Building 30,000 -30,000
Deferred tax Asset 5,375 2,200 -3,175
Land 10,500 10,500 0
Discount on Bonds Payable 1,305 1,305
Totals 734,525 1,482,855 1,408,330
Credits
Allowance for doubtful accounts 6,000 4,500 -1,500
Accounts Payable 84,500 210,000 125,500
Deferred tax Liability 1,000 3,300 2,300
Income Taxes Payable 3,500 9,000 5,500
Note Payable (long-term) 3,500 -3,500
Accumulated Depreciation on Building 2,500 -2,500
Accumulated Depreciation on Leased Asset 3,000 3,000
Lease obligation 18,000 18,000
Interest payable on lease obligation 1,800 1,800
Interest payable (bonds) 1,800 1,800
Bonds Payable 45,000 45,000
Billings on Contruction in process 150,000 325,000 310,000
Pension liability 150,000 400,000 250,000
Convertible preferred stock, $100 par 9,000 -9,000
Common Stck, $10 par 14,000 24,500 10,500
Additional Paid-in Capital 8,700 13,700 5,000
Unrealized increase in value of markerable securities 1,500 1,800 300
Retaining earnings 297,325 421,455 124,130
Totals 734,525 1,482,855 1,408,330
Cash Flows from Operating Activities:
Profit for the year 124,130
Adding Non Cash Items
Add- Provision for tax 10975
Add- Interest on lease 1800
Add- Interest payable on bonds 1800
Add- Loss on discount on issue of bonds 1350
Add- Net Loss (30-60k) building destroyed 4000
Add- Depreciation 3000
Less- Allowance for change in provision 2500
Less- Accumlated Dep on Building 300
Add- Provision for dividend 650
Pension Liability
Add- Charge to Pension liability 350000
Less- Pension liability actually paid 100000
Less- Profit of Ricochet Co included 6000
Add- Bills on construction in process 175000
Add- increase in accounts payable 122500
Less- Provision for DD for the year 3500
Add- increase in value of marketable securities 300
Add- decrease in prepaid expense 35000
Less- Increase in accounts receivable 30000
Net Cash Flow from Operating Activities 706375 695205
Cash Flows from Investing Activities:
Less - Building Destroyed 26000
Add-Lease Equipment 18000
Add - Investment made 9500
Less - Increase in MS 1300
Add- Dividends from Ricochet 2000
Cash Flows from Financing Activities 219050
Investing and Financing Activities Not Affecting Cash:
Add-Common Stock 3000
Add-Cash raised from Issue of bonds 43650
Less- Lease liability paid for the year 2000
Decrease in Note Payable
Less- discount on bonds payable 1305
Less- Dividend paid 650
Net Increase in Cash: 695,205-219,050+42,695 76150 518850
Totals
Smart Construction Company
Statement of Cash Flows
For Year Ended June 30, 2017
Operating Activities:
     Net Income
     Adjustments for noncash income items:
      Adjustments from cash flow effect from working capital items:
      Net cash provided (used) by operating activities
Investing activities:
    Net cash provided (used) by investing activities
Financing Activities:
    Net cash provided (used) by financing activities
Net increase in cash (see Schedule 1)
Cash, June 30, 2016
Cash, June 30, 2017
Schedule 1: Investing and Financing Activities Not Affecting Cash

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