The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:
1 |
Dec. 31, 20Y2 |
Dec. 31, 20Y1 |
|
2 |
Assets |
||
3 |
Cash |
$918,420.00 |
$965,310.00 |
4 |
Accounts receivable (net) |
?828,210.00 |
762,450.00 |
5 |
Inventories |
1,268,100.00 |
1,162,260.00 |
6 |
Prepaid expenses |
29,220.00 |
35,270.00 |
7 |
Land |
315,170.00 |
479,410.00 |
8 |
Buildings |
1,463,110.00 |
901,510.00 |
9 |
Accumulated depreciation-buildings |
(409,500.00) |
(383,260.00) |
10 |
Equipment |
512,060.00 |
454,500.00 |
11 |
Accumulated depreciation-equipment |
(141,780.00) |
(159,530.00) |
12 |
Total assets |
$4,783,010.00 |
$4,217,920.00 |
13 |
Liabilities and Stockholders’ Equity |
||
14 |
Accounts payable (merchandise creditors) |
$921,870.00 |
$957,980.00 |
15 |
Bonds payable |
270,000.00 |
0.00 |
16 |
Common stock, $25 par |
328,500.00 |
116,000.00 |
17 |
Paid-in capital: Excess of issue price over par—common stock |
754,500.00 |
559,000.00 |
18 |
Retained earnings |
2,508,140.00 |
2,584,940.00 |
19 |
Total liabilities and stockholders’ equity |
$4,783,010.00 |
$4,217,920.00 |
The noncurrent asset, noncurrent liability, and stockholders’ equity accounts for 20Y2 are as follows:
ACCOUNT Land
ACCOUNT NO. | ||||||
Balance | ||||||
Date | Item | Debit | Credit | Debit | Credit | |
20Y2 | ||||||
Jan. | 1 | Balance | 479,410 | |||
Apr. | 20 | Realized $150,820 cash from sale | 164,240 | 315,170 |
ACCOUNT Buildings
ACCOUNT NO. | ||||||
Balance | ||||||
Date | Item | Debit | Credit | Debit | Credit | |
20Y2 | ||||||
Jan. | 1 | Balance | 901,510 | |||
Apr. | 20 | Acquired for cash | 561,600 | 1,463,110 |
ACCOUNT Accumulated Depreciation––Buildings
ACCOUNT NO. | ||||||
Balance | ||||||
Date | Item | Debit | Credit | Debit | Credit | |
20Y2 | ||||||
Jan. | 1 | Balance | 383,260 | |||
Dec. | 31 | Depreciation for year | 26,240 | 409,500 |
ACCOUNT Equipment
ACCOUNT NO. | ||||||
Balance | ||||||
Date | Item | Debit | Credit | Debit | Credit | |
20Y2 | ||||||
Jan. | 1 | Balance | 454,500 | |||
26 | Discarded, no salvage | 46,400 | 408,100 | |||
Aug. | 11 | Purchased for cash | 103,960 | 512,060 |
ACCOUNT Accumulated Depreciation ––Equipment
ACCOUNT NO. | ||||||
Balance | ||||||
Date | Item | Debit | Credit | Debit | Credit | |
20Y2 | ||||||
Jan. | 1 | Balance | 159,530 | |||
26 | Equipment discarded | 46,400 | 113,130 | |||
Dec. | 31 | Depreciation for year | 28,650 | 141,780 |
ACCOUNT Bonds Payable
ACCOUNT NO. | ||||||
Balance | ||||||
Date | Item | Debit | Credit | Debit | Credit | |
20Y2 | ||||||
May | 1 | Issued 20-year bonds | 270,000 | 270,000 |
ACCOUNT Common Stock $25 par
ACCOUNT NO. | ||||||
Balance | ||||||
Date | Item | Debit | Credit | Debit | Credit | |
20Y2 | ||||||
Jan. | 1 | Balance | 116,000 | |||
Dec. | 7 | Issued 8,500 shares of common stock for $48 per share | 212,500 | 328,500 |
ACCOUNT Paid-In Capital in Excess of Par––Common Stock
ACCOUNT NO. | ||||||
Balance | ||||||
Date | Item | Debit | Credit | Debit | Credit | |
20Y2 | ||||||
Jan. | 1 | Balance | 559,000 | |||
Dec. | 7 | Issued 8,500 shares of common stock for $48 per share | 195,500 | 754,500 |
ACCOUNT Retained Earnings
ACCOUNT NO. | ||||||
Balance | ||||||
Date | Item | Debit | Credit | Debit | Credit | |
20Y2 | ||||||
Jan. | 1 | Balance | 2,584,940 | |||
Dec. | 31 | Net loss | 44,360 | 2,540,580 | ||
31 | Cash dividends | 32,440 | 2,508,140 |
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
Solution:
Statement of Cash
Flows - Whitman Co.. For the year ended December 31, 20Y2 |
||
Particulars | Details | Amount |
Cash Flow from Operating Activities: | ||
Net Income (Loss) | -$44,360.00 | |
Adjustments to reconcile net income to cash flow from operating activities: | ||
Depreciation | $54,890.00 | |
Loss on sale of land ($164,240 - $150,820) | $13,420.00 | |
Increase in Accounts Receivables ($828210 - $762450) | -$65,760.00 | |
Increase in Inventory ($1268100 - $1162260) | -$105,840.00 | |
Decrease in Prepaid Expenses ($35270 - $29220) | $6,050.00 | |
Decrease in Accounts payable ($957980 - $921870) | -$36,110.00 | |
Total Adjustments | -$133,350.00 | |
Net Cash Flow From Operating Activites (A) | -$177,710.00 | |
Cash Flow from Investing Activities: | ||
Purchase of Building | -$561,600.00 | |
Purchase of Equipment | -$103,960.00 | |
Sale of land | $150,820.00 | |
Net Cash Flow From Investing Activites (B) | -$514,740.00 | |
Cash Flow from Financing Activities: | ||
Dividend paid | -$32,440.00 | |
Proceed from issue of bond | $270,000.00 | |
Proceed from issue of common stock ($212,500 + $195,500) | $408,000.00 | |
Net Cash Flow From Financing Activites (C) | $645,560.00 | |
Total Cash flow from all activities (A+B+C) | -$46,890.00 | |
Cash at the beginning of the year | $965,310.00 | |
Cash at the end of year | $918,420.00 |
Get Answers For Free
Most questions answered within 1 hours.