The comparative balance sheet of Canace Products Inc. for December 31, 2016 and
ID: 2465104 • Letter: T
Question
The comparative balance sheet of Canace Products Inc. for December 31, 2016 and 2015, is shown as follows: 1 Dec. 31, 2016 Dec. 31, 2015 2 Assets 3 Cash $643,400.00 $679,400.00 4 Accounts receivable (net) 566,800.00 547,400.00 5 Inventories 1,011,000.00 982,800.00 6 Investments 0.00 240,000.00 7 Land 520,000.00 0.00 8 Equipment 880,000.00 680,000.00 9 Accumulated depreciation-equipment (244,400.00) (200,400.00) 10 Total assets $3,376,800.00 $2,929,200.00 11 Liabilities and Stockholders’ Equity 12 Accounts payable (merchandise creditors) $771,800.00 $748,400.00 13 Accrued expenses payable (operating expenses) 63,400.00 70,800.00 14 Dividends payable 8,800.00 6,400.00 15 Common stock, $2 par 56,000.00 32,000.00 16 Paid-in capital: Excess of issue price over par—common stock 408,000.00 192,000.00 17 Retained earnings 2,068,800.00 1,879,600.00 18 Total liabilities and stockholders’ equity $3,376,800.00 $2,929,200.00 The income statement for the year ended December 31, 2016, is as follows: 1 Sales $5,980,000.00 2 Cost of merchandise sold 2,452,000.00 3 Gross profit $3,528,000.00 4 Operating expenses: 5 Depreciation expense $44,000.00 6 Other operating expenses 3,100,000.00 7 Total operating expenses 3,144,000.00 8 Operating income $384,000.00 9 Other expense: 10 Loss on sale of investments (64,000.00) 11 Income before income tax $320,000.00 12 Income tax expense 102,800.00 13 Net income $217,200.00 Additional data obtained from an examination of the accounts in the ledger for 2016 are as follows: A. Equipment and land were acquired for cash. B. There were no disposals of equipment during the year. C. The investments were sold for $176,000 cash D. The common stock was issued for cash. E. There was a $28,000 debit to Retained Earnings for cash dividends declared. Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign only to indicate the net cash outflows for each section. “Deduct”, “Less” or colons (:) will automatically appear if required.
The comparative balance sheet of Canace Products 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
$643,400.00
$679,400.00
4
Accounts receivable (net)
566,800.00
547,400.00
5
Inventories
1,011,000.00
982,800.00
6
Investments
0.00
240,000.00
7
Land
520,000.00
0.00
8
Equipment
880,000.00
680,000.00
9
Accumulated depreciation-equipment
(244,400.00)
(200,400.00)
10
Total assets
$3,376,800.00
$2,929,200.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$771,800.00
$748,400.00
13
Accrued expenses payable (operating expenses)
63,400.00
70,800.00
14
Dividends payable
8,800.00
6,400.00
15
Common stock, $2 par
56,000.00
32,000.00
16
Paid-in capital: Excess of issue price over par—common stock
408,000.00
192,000.00
17
Retained earnings
2,068,800.00
1,879,600.00
18
Total liabilities and stockholders’ equity
$3,376,800.00
$2,929,200.00
The income statement for the year ended December 31, 2016, is as follows:
Question not attempted.
1
Sales
$5,980,000.00
2
Cost of merchandise sold
2,452,000.00
3
Gross profit
$3,528,000.00
4
Operating expenses:
5
Depreciation expense
$44,000.00
6
Other operating expenses
3,100,000.00
7
Total operating expenses
3,144,000.00
8
Operating income
$384,000.00
9
Other expense:
10
Loss on sale of investments
(64,000.00)
11
Income before income tax
$320,000.00
12
Income tax expense
102,800.00
13
Net income
$217,200.00
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 direct 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.
. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign only to indicate the net cash outflows for each section. “Deduct”, “Less” or colons (:) will automatically appear if required.
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.
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$643,400.00
$679,400.00
4
Accounts receivable (net)
566,800.00
547,400.00
5
Inventories
1,011,000.00
982,800.00
6
Investments
0.00
240,000.00
7
Land
520,000.00
0.00
8
Equipment
880,000.00
680,000.00
9
Accumulated depreciation-equipment
(244,400.00)
(200,400.00)
10
Total assets
$3,376,800.00
$2,929,200.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$771,800.00
$748,400.00
13
Accrued expenses payable (operating expenses)
63,400.00
70,800.00
14
Dividends payable
8,800.00
6,400.00
15
Common stock, $2 par
56,000.00
32,000.00
16
Paid-in capital: Excess of issue price over par—common stock
408,000.00
192,000.00
17
Retained earnings
2,068,800.00
1,879,600.00
18
Total liabilities and stockholders’ equity
$3,376,800.00
$2,929,200.00
Explanation / Answer
ans a Statement of cash flow (direct method) Cash flows from operating activities Cash inflow Cash received from customers 5,960,600.00 Cash outflow Cash payments for merchandise -2456800 Cash payments for operating expenses -3107400 Cash payments for income taxes -102800 293,600.00 Net cash from operating activities 293,600.00 Cash flows from investing activities Cash paid for purchase of equipment -200000 Cash paid for purchase of land -520000 Cash received from sale of investments 176000 -544000 Net cash used investing activities (544,000.00) Cash flows from financing activities Borrowings from Bonds Payable Cash received from sale of common stock (408000+56000)-(32000+192000) 240000 Cash paid for dividends (6400+28000-8800) -25600 214,400.00 Net cash from financing activities 214,400.00 Net Increase in cash and cash equivalents (36,000.00) Cash and cash equivalents at beginning of period 679,400.00 Ending Balance 643,400.00 working (a) Sales working (a) Sales sales 5980000 Less: Increase in accounts receivable -19400 Cash receipts (collections from customers) 5960600 (b) Cost of goods sold Cost of good sold 2452000 Add: ending Inventory 1011000 Goods avialable for sale 3463000 Less: Beginning Inventory 982800 Purchases 2480200 dedcut: ending accounts payable 771800 1708400 Add: Opening Accounts payable 748400 Cash purchases (payments for merchandise) 2456800 (c) Income taxes Income tax expense 102800 Deduct ending income tax payable 0 102800 Less: ending DTL 0 add: beginning DTL 0 Payment of income tax 102800 d) Payment of operating expenses Other Operating expenses 3100000 Ded ending accured expenses payable 63400 3036600 Add: beginning accured expenses payable 70800 d) Payment of other operati ng expenses 3107400 If any doubt please comment. If satisfied you can rate