Problem 12-7A (Part Level Submission) Sheridan Company Comparative Balance Sheet
ID: 2409483 • Letter: P
Question
Problem 12-7A (Part Level Submission)
Sheridan Company
Comparative Balance Sheets
December 31
Assets
2017
2016
Cash
$ 77,700
$ 44,400
Accounts receivable
44,400
31,080
Inventory
62,160
44,400
Property, plant, and equipment
133,200
173,160
Accumulated depreciation
(71,040
)
(53,280
)
Total
$246,420
$239,760
Liabilities and Stockholders’ Equity
Accounts payable
$ 42,180
$ 33,300
Income taxes payable
15,540
17,760
Bonds payable
37,740
73,260
Common stock
39,960
31,080
Retained earnings
111,000
84,360
Total
$246,420
$239,760
Sheridan Company
Income Statement
For the Year Ended December 31, 2017
Sales revenue
$537,240
Cost of goods sold
388,500
Gross profit
148,740
Selling expenses
$39,960
Administrative expenses
13,320
53,280
Income from operations
95,460
Interest expense
6,660
Income before income taxes
88,800
Income tax expense
17,760
Net income
$ 71,040
Problem 12-7A (Part Level Submission)
Presented below are the financial statements of Sheridan Company.Sheridan Company
Comparative Balance Sheets
December 31
Assets
2017
2016
Cash
$ 77,700
$ 44,400
Accounts receivable
44,400
31,080
Inventory
62,160
44,400
Property, plant, and equipment
133,200
173,160
Accumulated depreciation
(71,040
)
(53,280
)
Total
$246,420
$239,760
Liabilities and Stockholders’ Equity
Accounts payable
$ 42,180
$ 33,300
Income taxes payable
15,540
17,760
Bonds payable
37,740
73,260
Common stock
39,960
31,080
Retained earnings
111,000
84,360
Total
$246,420
$239,760
Sheridan Company
Income Statement
For the Year Ended December 31, 2017
Sales revenue
$537,240
Cost of goods sold
388,500
Gross profit
148,740
Selling expenses
$39,960
Administrative expenses
13,320
53,280
Income from operations
95,460
Interest expense
6,660
Income before income taxes
88,800
Income tax expense
17,760
Net income
$ 71,040
Additional data:
1. Depreciation expense was $38,850. 2. Dividends declared and paid were $44,400. 3. During the year equipment was sold for $18,870 cash. This equipment cost $39,960 originally and had accumulated depreciation of $21,090 at the time of sale.
Explanation / Answer
Sheridan Company Statement of Cash Flows For the Year Ended December 31, 2017 Cash flows from operating activities Net Income $ 71,040 Adjustments to reconcile net income to : Depreciation expense $ 38,850 Increase in accounts receivable $ (13,320) 31080-44400 Increase in inventory $ (17,760) 44400-62160 Increase in accounts payable $ 8,880 42180-33300 Decrease in income tax payable $ (2,220) 15540-17760 $ 14,430 Net cash provided by operating activities $ 85,470 Cash flows from investing activities Cash received from sale of equipment $ 18,870 Net cash provided by investing activities $ 18,870 Cash flows from financing activities Cash paid as dividend $ (44,400) Repayment of bond $ (35,520) 37740-73260 Cash received from issuance of common stock $ 8,880 39960-31080 Net cash used by financing activities $ (71,040) Net Increase in cash and cash equivalents $ 33,300 Cash and cash equivalents at beginning of period $ 44,400 Cash and cash equivalents at end of period $ 77,700