Problem 12-7A (Part Level Submission) Presented below are the financial statemen
ID: 2408087 • Letter: P
Question
Problem 12-7A (Part Level Submission)
Presented below are the financial statements of Splish Brothers Company.
Splish Brothers Company
Comparative Balance Sheets
December 31
Assets
2017
2016
$ 75,950
$ 43,400
43,400
30,380
60,760
43,400
130,200
169,260
(69,440
)
(52,080
)
$240,870
$234,360
Liabilities and Stockholders’ Equity
$ 41,230
$ 32,550
15,190
17,360
36,890
71,610
39,060
30,380
108,500
82,460
$240,870
$234,360
Splish Brothers Company
Income Statement
For the Year Ended December 31, 2017
$525,140
379,750
145,390
$39,060
13,020
52,080
93,310
6,510
86,800
17,360
$ 69,440
Additional data:
During the year equipment was sold for $18,445 cash. This equipment cost $39,060 originally and had accumulated depreciation of $20,615 at the time of sale.
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Adjustments to reconcile net income to
Splish Brothers Company
Comparative Balance Sheets
December 31
Assets
2017
2016
Cash$ 75,950
$ 43,400
Accounts receivable43,400
30,380
Inventory60,760
43,400
Property, plant, and equipment130,200
169,260
Accumulated depreciation(69,440
)
(52,080
)
Total$240,870
$234,360
Liabilities and Stockholders’ Equity
Accounts payable$ 41,230
$ 32,550
Income taxes payable15,190
17,360
Bonds payable36,890
71,610
Common stock39,060
30,380
Retained earnings108,500
82,460
Total$240,870
$234,360
Explanation / Answer
Answers
Assets
2017
2016
Increase (Decrease)
[A]
[B]
[ A – B]
Cash
$ 75,950.00
$ 43,400.00
$ 32,550.00
Accounts receivable
$ 43,400.00
$ 30,380.00
$ 13,020.00
Inventory
$ 60,760.00
$ 43,400.00
$ 17,360.00
Property, plant, and equipment
$ 1,30,200.00
$ 1,69,260.00
$ (39,060.00)
Accumulated depreciation
$ (69,440.00)
$ (52,080.00)
$ (17,360.00)
Total
$ 2,40,870.00
$ 2,34,360.00
$ 6,510.00
Liabilities and Stockholders’ Equity
2017
2016
Increase (Decrease)
[A]
[B]
[ A – B]
Accounts payable
$ 41,230.00
$ 32,550.00
$ 8,680.00
Income taxes payable
$ 15,190.00
$ 17,360.00
$ (2,170.00)
Bonds payable
$ 36,890.00
$ 71,610.00
$ (34,720.00)
Common stock
$ 39,060.00
$ 30,380.00
$ 8,680.00
Retained earnings
$ 1,08,500.00
$ 82,460.00
$ 26,040.00
Total
$ 2,40,870.00
$ 2,34,360.00
$ 6,510.00
Property, plant, and equipment - Beginning Balance
$ 1,69,260.00
Equipment sold for
$ (18,445.00)
Accumulated Depreciation on sold equipment
$ (20,615.00)
Ending balance (matching with balance provided)
$ 1,30,200.00
Accumulated Depreciation Beginning balance
$ 52,080.00
Depreciation expense for the year
$ 37,975.00
Accumulated Depreciation on sold equipment
$ (20,615.00)
Ending balance
$ 69,440.00
For the year ended 31 Dec 2017
Cash Flow from Operating Activities
Net Income
$ 69,440.00
Adjustments to reconcile Net Income to
Cash flows from operating Activities
Depreciation expense
$ 37,975.00
Increase in Accounts receivables
$ (13,020.00)
Increase In Inventory
$ (17,360.00)
Increase in Accounts Payable
$ 8,680.00
Decrease in Income tax payable
$ (2,170.00)
$ 14,105.00
Net Cash provided by Operating activities (A)
$ 83,545.00
Cash Flows from Investing Activities
Sale of Equipment
$ 18,445.00
Net cash provided by Investing Activities (B)
$ 18,445.00
Cash Flows from Financing Activities
Redemptions of Bonds
$ (34,720.00)
Issuance of Common Stock
$ 8,680.00
Dividends paid
$ (43,400.00)
Net cash used by Financing activities (C )
$ (69,440.00)
Net Increase in Cash (A+B+C)
$ 32,550.00
Cash at the beginning of the period
$ 43,400.00
Cash at the end of the period
$ 75,950.00
Assets
2017
2016
Increase (Decrease)
[A]
[B]
[ A – B]
Cash
$ 75,950.00
$ 43,400.00
$ 32,550.00
Accounts receivable
$ 43,400.00
$ 30,380.00
$ 13,020.00
Inventory
$ 60,760.00
$ 43,400.00
$ 17,360.00
Property, plant, and equipment
$ 1,30,200.00
$ 1,69,260.00
$ (39,060.00)
Accumulated depreciation
$ (69,440.00)
$ (52,080.00)
$ (17,360.00)
Total
$ 2,40,870.00
$ 2,34,360.00
$ 6,510.00
Liabilities and Stockholders’ Equity
2017
2016
Increase (Decrease)
[A]
[B]
[ A – B]
Accounts payable
$ 41,230.00
$ 32,550.00
$ 8,680.00
Income taxes payable
$ 15,190.00
$ 17,360.00
$ (2,170.00)
Bonds payable
$ 36,890.00
$ 71,610.00
$ (34,720.00)
Common stock
$ 39,060.00
$ 30,380.00
$ 8,680.00
Retained earnings
$ 1,08,500.00
$ 82,460.00
$ 26,040.00
Total
$ 2,40,870.00
$ 2,34,360.00
$ 6,510.00