The comparative balance sheet of Cromme Inc. for December 31, 2016 and 2015, is
ID: 2421894 • Letter: T
Question
The comparative balance sheet of Cromme Inc. for December 31, 2016 and 2015, is shown as follows:
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:
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. 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
Particulars Amount Amount Operating activities Net income $199,540 Depriciation 18400 Gain on sale f INVT (40,000) Increase in A/c Receivable (18,880) Increase in inventories (24,640) Increase in A/P 19,520 Decrease in accrued expense (10,400) Cash flow from operating activities $143,540 Investing activities Sale of investments $280,000 Purchase of Land (328,000) Purchase of Equipment (152,000) Cash flow from investing activities (200,000) Financing activities Issue of common stock (417,500-280,000)+(150,000-100,000) 187,500 Cash dividends paid (96000+19200-24000) (91200) Cash flow from financing activities $96300 Cash flow from all activities $39,840 Add Beginning Cash balance $585,920 Ending Cash Balance As on 31 Dec-2016 $625,760