The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is
ID: 2414058 • Letter: T
Question
The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is shown as follows:
1
Dec. 31, 20Y3
Dec. 31, 20Y2
2
Assets
3
Cash
$626,640.00
$585,760.00
4
Accounts receivable (net)
226,900.00
208,390.00
5
Inventories
641,350.00
616,130.00
6
Investments
0.00
239,300.00
7
Land
328,730.00
0.00
8
Equipment
705,940.00
553,530.00
9
Accumulated depreciation-equipment
(166,970.00)
(148,000.00)
10
Total assets
$2,362,590.00
$2,055,110.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable
$425,140.00
$404,540.00
13
Accrued expenses payable
42,020.00
52,750.00
14
Dividends payable
23,580.00
19,500.00
15
Common stock, $4 par
154,000.00
100,000.00
16
Paid-in capital: Excess of issue price over par—common stock
416,600.00
279,400.00
17
Retained earnings
1,301,250.00
1,198,920.00
18
Total liabilities and stockholders’ equity
$2,362,590.00
$2,055,110.00
Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:
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 outflows, decreases in cash and a net cash outflow for each section, if required.
1
Dec. 31, 20Y3
Dec. 31, 20Y2
2
Assets
3
Cash
$626,640.00
$585,760.00
4
Accounts receivable (net)
226,900.00
208,390.00
5
Inventories
641,350.00
616,130.00
6
Investments
0.00
239,300.00
7
Land
328,730.00
0.00
8
Equipment
705,940.00
553,530.00
9
Accumulated depreciation-equipment
(166,970.00)
(148,000.00)
10
Total assets
$2,362,590.00
$2,055,110.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable
$425,140.00
$404,540.00
13
Accrued expenses payable
42,020.00
52,750.00
14
Dividends payable
23,580.00
19,500.00
15
Common stock, $4 par
154,000.00
100,000.00
16
Paid-in capital: Excess of issue price over par—common stock
416,600.00
279,400.00
17
Retained earnings
1,301,250.00
1,198,920.00
18
Total liabilities and stockholders’ equity
$2,362,590.00
$2,055,110.00
Explanation / Answer
Answers
Point no.
Dec. 31, 20Y3
Dec. 31, 20Y2
Increase (decrease)
1
[A]
[B]
[A – B]
2
Assets
3
Cash
$ 6,26,640.00
$ 5,85,760.00
$ 40,880.00
4
Accounts receivable (net)
$ 2,26,900.00
$ 2,08,390.00
$ 18,510.00
5
Inventories
$ 6,41,350.00
$ 6,16,130.00
$ 25,220.00
6
Investments
$ -
$ 2,39,300.00
$ (2,39,300.00)
7
Land
$ 3,28,730.00
$ -
$ 3,28,730.00
8
Equipment
$ 7,05,940.00
$ 5,53,530.00
$ 1,52,410.00
9
Accumulated depreciation-equipment
$ (1,66,970.00)
$ (1,48,000.00)
$ (18,970.00)
10
Total assets
$ 23,62,590.00
$ 20,55,110.00
$ 3,07,480.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable
$ 4,25,140.00
$ 4,04,540.00
$ 20,600.00
13
Accrued expenses payable
$ 42,020.00
$ 52,750.00
$ (10,730.00)
14
Dividends payable
$ 23,580.00
$ 19,500.00
$ 4,080.00
15
Common stock, $4 par
$ 1,54,000.00
$ 1,00,000.00
$ 54,000.00
16
Paid-in capital: Excess of issue price over par—common stock
$ 4,16,600.00
$ 2,79,400.00
$ 1,37,200.00
17
Retained earnings
$ 13,01,250.00
$ 11,98,920.00
$ 1,02,330.00
18
Total liabilities and stockholders’ equity
$ 23,62,590.00
$ 20,55,110.00
$ 3,07,480.00
---Cash Outflows are mentioned within “( )”
Working
Cash Flow Statement - Indirect Method
Cash Flows from Operating Activities
Point 'E' in question
Net Income
$ 1,98,010.00
Adjustment to reconcile net income to net operating cash
[279880 - 239300]
Gain on Sale of Investment
$ (40,580.00)
Point 9
Depreciation expense
$ 18,970.00
Point 4
Increase in Accounts receivables
$ (18,510.00)
Point 5
Increase in Inventories
$ (25,220.00)
Point 12
Increase in Accounts payable
$ 20,600.00
Point 13
Decrease in Accrued expenses
$ (10,730.00)
Point 14
Increase in Dividend payable
$ 4,080.00
$ (51,390.00)
Net Cash Flows from Operating Activities (A)
$ 1,46,620.00
Cash Flow from Investing Activities
Point 'A'
Sale of Investments
$ 2,79,880.00
Point 'B' and 8
Equipment purchased
$ (1,52,410.00)
Point 'B' and 7
Land Purchased
$ (3,28,730.00)
Net Cash flow used in Investing activities (B)
$ (2,01,260.00)
Cash Flow from Financing Activities
Point 15
Common Stock issued
$ 54,000.00
Point 16
Paid in capital on stock issued
$ 1,37,200.00
Point 'F'
Dividends paid
$ (95,680.00)
Net Cash flows provided from Financing activities ( C)
$ 95,520.00
Net Increase (decrease) in Cash [A+B+C)
$ 40,880.00
Point 3
Cash at beginning
$ 5,85,760.00
Point 3
Cash at the end
$ 6,26,640.00
Point no.
Dec. 31, 20Y3
Dec. 31, 20Y2
Increase (decrease)
1
[A]
[B]
[A – B]
2
Assets
3
Cash
$ 6,26,640.00
$ 5,85,760.00
$ 40,880.00
4
Accounts receivable (net)
$ 2,26,900.00
$ 2,08,390.00
$ 18,510.00
5
Inventories
$ 6,41,350.00
$ 6,16,130.00
$ 25,220.00
6
Investments
$ -
$ 2,39,300.00
$ (2,39,300.00)
7
Land
$ 3,28,730.00
$ -
$ 3,28,730.00
8
Equipment
$ 7,05,940.00
$ 5,53,530.00
$ 1,52,410.00
9
Accumulated depreciation-equipment
$ (1,66,970.00)
$ (1,48,000.00)
$ (18,970.00)
10
Total assets
$ 23,62,590.00
$ 20,55,110.00
$ 3,07,480.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable
$ 4,25,140.00
$ 4,04,540.00
$ 20,600.00
13
Accrued expenses payable
$ 42,020.00
$ 52,750.00
$ (10,730.00)
14
Dividends payable
$ 23,580.00
$ 19,500.00
$ 4,080.00
15
Common stock, $4 par
$ 1,54,000.00
$ 1,00,000.00
$ 54,000.00
16
Paid-in capital: Excess of issue price over par—common stock
$ 4,16,600.00
$ 2,79,400.00
$ 1,37,200.00
17
Retained earnings
$ 13,01,250.00
$ 11,98,920.00
$ 1,02,330.00
18
Total liabilities and stockholders’ equity
$ 23,62,590.00
$ 20,55,110.00
$ 3,07,480.00