The comparative balance sheets for Wildhorse Co. as of December 31 are presented
ID: 2403065 • Letter: T
Question
The comparative balance sheets for Wildhorse Co. as of December 31 are presented below.
Wildhorse Co.
Comparative Balance Sheets
December 31
Assets
2017
2016
Cash
$ 93,364
$ 61,785
Accounts receivable
68,650
79,634
Inventory
207,941
194,966
Prepaid expenses
20,979
28,833
Land
199,085
178,490
Buildings
274,600
274,600
Accumulated depreciation—buildings
(82,380
)
(54,920
)
Equipment
308,925
212,815
Accumulated depreciation—equipment
(61,785
)
(48,055
)
Total
$1,029,379
$928,148
Liabilities and Stockholders’ Equity
Accounts payable
$ 61,414
$ 49,428
Bonds payable
411,900
411,900
Common stock, $1 par
274,600
219,680
Retained earnings
281,465
247,140
Total
$1,029,379
$928,148
Additional information:
Prepare a statement of cash flows for the year ended December 31, 2017, using the indirect method.
Wildhorse Co.
Comparative Balance Sheets
December 31
Assets
2017
2016
Cash
$ 93,364
$ 61,785
Accounts receivable
68,650
79,634
Inventory
207,941
194,966
Prepaid expenses
20,979
28,833
Land
199,085
178,490
Buildings
274,600
274,600
Accumulated depreciation—buildings
(82,380
)
(54,920
)
Equipment
308,925
212,815
Accumulated depreciation—equipment
(61,785
)
(48,055
)
Total
$1,029,379
$928,148
Liabilities and Stockholders’ Equity
Accounts payable
$ 61,414
$ 49,428
Bonds payable
411,900
411,900
Common stock, $1 par
274,600
219,680
Retained earnings
281,465
247,140
Total
$1,029,379
$928,148
Explanation / Answer
Answer
Cash Flow Statement
Detail
Net
Cash Flow from Operating Activities
Net Income before taxes
50,801
Add: Non cash and Non operating Expenses
Depreciation on Equipmeny
30,206
Depreciation on Building
27,460
Loss on sale of Equip.
2,746
Working Capital Changes
Decrease in Accounts Receivable
10,984
Increase in Inventory
(12,975)
Decrease in Prepaid expenses
7,854
Increase in Accounts Payable
11,986
Cash Flow from Operating Activities (A)
129,062
Cash Flow from Investing Activities
Sale of Equipment
10,984
Purchases of Equipment
(126,316)
Sale of Land
34,325
Cash Used in Investing Activities (B)
(81,007)
Cash Flow from Financing Activities
Dividend Paid
(16,476)
Cash used in Financing Activities ( C)
(16,476)
Decrease in Cash (A+B+C)
31,579
Opening Cash
61,785
Closing Cash
93,364
Euipment
Beg. Bal
212,815
Bank
10,984
Acc. Depreciation
16,476
P&l (Profit on sale)
Loss
2,746
Bank (Purchases)
126,316
Closing Bal.
308,925
Total
339,131
Total
339,131
Acc. Depreciation - Equipment
Beg. Bal
48,055
Equipment (Sold) (Bal.)
16,476
P&L (Current Year)
30,206
Closing Bal.
61,785
Total
78,261
Total
78,261
Land
Beg. Bal
178,490
Bank
34,325
Common Stock
54,920
Closing Bal.
199,085
Total
233,410
Total
233,410
Cash Flow Statement
Detail
Net
Cash Flow from Operating Activities
Net Income before taxes
50,801
Add: Non cash and Non operating Expenses
Depreciation on Equipmeny
30,206
Depreciation on Building
27,460
Loss on sale of Equip.
2,746
Working Capital Changes
Decrease in Accounts Receivable
10,984
Increase in Inventory
(12,975)
Decrease in Prepaid expenses
7,854
Increase in Accounts Payable
11,986
Cash Flow from Operating Activities (A)
129,062
Cash Flow from Investing Activities
Sale of Equipment
10,984
Purchases of Equipment
(126,316)
Sale of Land
34,325
Cash Used in Investing Activities (B)
(81,007)
Cash Flow from Financing Activities
Dividend Paid
(16,476)
Cash used in Financing Activities ( C)
(16,476)
Decrease in Cash (A+B+C)
31,579
Opening Cash
61,785
Closing Cash
93,364