The comparative balance sheet of Del Ray Enterprises Inc. at December 31, 2016 a
ID: 2500966 • Letter: T
Question
The comparative balance sheet of Del Ray Enterprises Inc. at December 31, 2016 and 2015, is as follows:
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$145,630.00
$180,110.00
4
Accounts receivable (net)
224,520.00
241,890.00
5
Merchandise inventory
321,860.00
299,730.00
6
Prepaid expenses
12,550.00
10,220.00
7
Equipment
655,090.00
537,200.00
8
Accumulated depreciation-equipment
(170,220.00)
(132,040.00)
9
Total assets
$1,189,430.00
$1,137,110.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$250,110.00
$237,190.00
12
Mortgage note payable
0.00
335,380.00
13
Common stock, $10 par
75,000.00
25,000.00
14
Paid-in capital: Excess of issue price over par—common stock
460,000.00
320,000.00
15
Retained earnings
404,320.00
219,540.00
16
Total liabilities and stockholders’ equity
$1,189,430.00
$1,137,110.00
Additional data obtained from the income statement and from an examination of the accounts in the ledger for 2016 are as follows:
Cash dividends declared and paid, $154,580
Net loss
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
$145,630.00
$180,110.00
4
Accounts receivable (net)
224,520.00
241,890.00
5
Merchandise inventory
321,860.00
299,730.00
6
Prepaid expenses
12,550.00
10,220.00
7
Equipment
655,090.00
537,200.00
8
Accumulated depreciation-equipment
(170,220.00)
(132,040.00)
9
Total assets
$1,189,430.00
$1,137,110.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$250,110.00
$237,190.00
12
Mortgage note payable
0.00
335,380.00
13
Common stock, $10 par
75,000.00
25,000.00
14
Paid-in capital: Excess of issue price over par—common stock
460,000.00
320,000.00
15
Retained earnings
404,320.00
219,540.00
16
Total liabilities and stockholders’ equity
$1,189,430.00
$1,137,110.00
Explanation / Answer
Del ray Enterprises Inc Cash Flow statement for the year ended Dec 31. 2016. Cash Flow from Opearting Activities Amt $ Net Income for the year 2016 339,360 Add : Depreceiation for the year 2016 82,730 Changes in Working Capital 2016 Decrease in Accounts Receivable 17,370 Increase in Merchandise Inventory (22,130) Increase in Prepaid Expenses (2,330) Increase in Accounts Payable 12,920 Net Cash flow from Operating Activities 427,920 Cash Flow from Investing Activities Cash Paid for purchase of Equipment (162,440) Net Cash Flow from Investing Activities (162,440) Cash Flow from Financing Activities Cash Paid to retire Mortgage Notes payable (335,380) Cash received from sale of common stock 190,000 Cash paid for Dividends (154,580) Net Cash Flow from Financing Activities (299,960) Net Cash flow from Opearting, Investing & (34,480) Financing Activities Opening Balance Cash 180,110 Net Change in Cash (34,480) Closing Balance Cash 145,630