The comparative balance sheets for Rothlisberger Company as of December 31 are p
ID: 2524391 • Letter: T
Question
The comparative balance sheets for Rothlisberger Company as of December 31 are presented below. Rothlisberger Company Comparative Balance Sheets December 31 Assets Cash Accounts receivable Inventory Prepaid expenses Land Buildings Accumulated depreciation-buildings (60,000) (40,000) Equipment Accumulated depreciation-equipment (45,000) (35,000) 2019 2018 $81,000 $45,000 41,000 62,000 151,450 142,000 15,280 21,000 105,000 130,000 200,000 200,000 221,000 155,000 Total Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock, $1 par Retained earnings $709,730 $680,000 $47,730 $40,000 260,000 300,000 200,000 160,000 202,000 180,000 $709,730 $680,000 Total Additional information: 1. Operating expenses include depreciation expense of $42,000 and charges from prepa d expenses of $5,720. 2. Land was sold for cash at book value. 3. Cash dividends of $20,000 were paid. 4. Net income for 2019 was $42,000. 5. Equipment was purchased for $88,000 cash. In addition, equipment costing $22,000 with a book value of $10,000 was sold for $6,000 cash. 6. Bonds were converted at face value by issuing 40,000 shares of $1 par value common stock.Explanation / Answer
Cash flow indirect method Cash flow from operating activities Net income 42000 Adjustments to reconcile the net income Gain on sale of equipment Depreciation expense 42000 Loss on sale of equipment 4000 Changes in current asset and liabilities decrease in prepaid expense 5720 Decrease in accounts receivable 21000 Increase in Inventory -9450 Increase in accounts payable 7730 71000 Cash flow from operating activities 113000 Cash flow from Investing activities Equipment purchased -88000 Equipment sold 6000 Land sold 25000 Cash flow from Investing activities -57000 Cash flow from Financing activities Bonds payable Common stock Dividend paid -20000 Cash flow from Financing activities -20000 Net Cash and cash equivalent 36000 Add Beginning cash and cash equivalent 45000 Ending cash and cash equivalent 81000