Part1 The comparative balance sheet of Cromme Inc. for December 31, 2016 and 201
ID: 2475549 • Letter: P
Question
Part1
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
$626,100.00
$585,190.00
4
Accounts receivable (net)
228,630.00
208,060.00
5
Inventories
641,030.00
617,620.00
6
Investments
0.00
239,830.00
7
Land
328,160.00
0.00
8
Equipment
705,110.00
553,850.00
9
Accumulated depreciation-equipment
(166,840.00)
(147,700.00)
10
Total assets
$2,362,190.00
$2,056,850.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$423,690.00
$404,660.00
13
Accrued expenses payable (operating expenses)
42,340.00
53,240.00
14
Dividends payable
23,050.00
18,680.00
15
Common stock, $4 par
156,000.00
93,000.00
16
Paid-in capital: Excess of issue price over par—common stock
417,000.00
279,200.00
17
Retained earnings
1,300,110.00
1,208,070.00
18
Total liabilities and stockholders’ equity
$2,362,190.00
$2,056,850.00
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.
Cromme Inc.
Statement of Cash Flows
1
Cash flows from operating activities:
2
3
Adjustments to reconcile net income to net cash flow from operating activities:
4
5
6
Changes in current operating assets and liabilities:
7
8
9
10
11
12
13
Cash flows from investing activities:
14
15
16
17
18
19
Cash flows from financing activities:
20
21
22
23
24
Cash at the beginning of the year
25
Cash at the end of the year
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$626,100.00
$585,190.00
4
Accounts receivable (net)
228,630.00
208,060.00
5
Inventories
641,030.00
617,620.00
6
Investments
0.00
239,830.00
7
Land
328,160.00
0.00
8
Equipment
705,110.00
553,850.00
9
Accumulated depreciation-equipment
(166,840.00)
(147,700.00)
10
Total assets
$2,362,190.00
$2,056,850.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$423,690.00
$404,660.00
13
Accrued expenses payable (operating expenses)
42,340.00
53,240.00
14
Dividends payable
23,050.00
18,680.00
15
Common stock, $4 par
156,000.00
93,000.00
16
Paid-in capital: Excess of issue price over par—common stock
417,000.00
279,200.00
17
Retained earnings
1,300,110.00
1,208,070.00
18
Total liabilities and stockholders’ equity
$2,362,190.00
$2,056,850.00
Explanation / Answer
Cash Flow Statement Particulars Amount ($) Cash flow from operating activities Net Income 188,740 Adjustments to reconcile net income to net cash flow from operating activities: Add: Non Cash Expense Depreciation 19,140 Non Operating Gains/Loss: Gain on sale of Investment (39,470) Changes in Current Assets and Liabilities Less: Increase in current assets Account Receivable (20,570) Inventory (23,410) Add: Increase in current liabilities Dividend payable 4,370 Account Payable 19,030 Less: decrease in current liabilities Accreud Expenses Payable (10,900) (31,480) cash generated from operating activities 136,930 Cash flow from investing activities Sale of Investments 279,300 Purchase of Land (328,160) Purchase of Equipment (151,260) (200,120) Cash flow from financing activities Proceeds from Issue of Common Stock 200,800 Payment of Dividend (96,700) 104,100 Total Cash Flow Add: beginning Cash 585,190 Cash at the end 626,100