The comparative balance sheet of Cromme Inc. for December 31, 2016 and 2015, is
ID: 2418599 • Letter: T
Question
The comparative balance sheet of Cromme Inc. for December 31, 2016 and 2015, is shown as follows:
The comparative balance sheet of Cromme Inc. for December 31, 2016 and 2015, is shown as follows:
Question not attempted.
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$625,760.00
$585,920.00
4
Accounts receivable (net)
227,840.00
208,960.00
5
Inventories
641,760.00
617,120.00
6
Investments
0.00
240,000.00
7
Land
328,000.00
0.00
8
Equipment
705,120.00
553,120.00
9
Accumulated depreciation-equipment
(166,400.00)
(148,000.00)
10
Total assets
$2,362,080.00
$2,057,120.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$424,480.00
$404,960.00
13
Accrued expenses payable (operating expenses)
42,240.00
52,640.00
14
Dividends payable
24,000.00
19,200.00
15
Common stock, $4 par
150,000.00
100,000.00
16
Paid-in capital: Excess of issue price over par—common stock
417,500.00
280,000.00
17
Retained earnings
1,303,860.00
1,200,320.00
18
Total liabilities and stockholders’ equity
$2,362,080.00
$2,057,120.00
Additional data obtained from an examination of the accounts in the ledger for 2016 are as follows:
There was a $96,000 debit to Retained Earnings for cash dividends declared.
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities
The section of the statement of cash flows that reports the cash transactions affecting the determination of net income.
. 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. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section.
none
X
Labels and Amount Descriptions
In CengageNOW, a Label is a text entry that does not have an amount associated with it.
In CengageNOW, an Amount Description is a text entry other than an Account that has an amount associated with it.
none
X
Statement of Cash Flows
Shaded cells have feedback.
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities
The section of the statement of cash flows that reports the cash transactions affecting the determination of net income.
. 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. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section.
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$625,760.00
$585,920.00
4
Accounts receivable (net)
227,840.00
208,960.00
5
Inventories
641,760.00
617,120.00
6
Investments
0.00
240,000.00
7
Land
328,000.00
0.00
8
Equipment
705,120.00
553,120.00
9
Accumulated depreciation-equipment
(166,400.00)
(148,000.00)
10
Total assets
$2,362,080.00
$2,057,120.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$424,480.00
$404,960.00
13
Accrued expenses payable (operating expenses)
42,240.00
52,640.00
14
Dividends payable
24,000.00
19,200.00
15
Common stock, $4 par
150,000.00
100,000.00
16
Paid-in capital: Excess of issue price over par—common stock
417,500.00
280,000.00
17
Retained earnings
1,303,860.00
1,200,320.00
18
Total liabilities and stockholders’ equity
$2,362,080.00
$2,057,120.00
Explanation / Answer
Cash Flow Statement for the year ended December 31, 2016:
Indirect Method
$ $ Cash flows from operating activities Net income for the year 199,540 Depreciation expense 18,400 Less gain on sale on sale of investments (40,000) Operating profit before adjustments for working capital changes 177,940 Increase in accounts receivable (18,880) Increase in inventories (24,640) Increase in accounts payable 19,520 Decrease in accrued expenses payable (10,400) (34,400) Net cash flows from operating activities 143,540 Cash flows from investing activities Purchase of equipment (152,000) Sale of investments 280,000 Purchase of land (328,000) Net cash used in investing activities (200,000) Cash flows from financing activities Issue of common stock 187,500 Dividends paid (91,200) Net cash flows from financing activities 96,300 Net increase in cash 39,840 Beginning cash 585,920 Ending cash 625,760