The comparative balance sheet of Cromme Inc. for December 31, 2016 and 2015, is
ID: 2529275 • 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
$625,080.00
$586,430.00
4
Accounts receivable (net)
228,260.00
209,470.00
5
Inventories
641,070.00
616,400.00
6
Investments
0.00
240,170.00
7
Land
327,640.00
0.00
8
Equipment
705,000.00
552,830.00
9
Accumulated depreciation-equipment
(165,670.00)
(148,610.00)
10
Total assets
$2,361,380.00
$2,056,690.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$425,090.00
$405,900.00
13
Accrued expenses payable (operating expenses)
43,140.00
52,460.00
14
Dividends payable
23,780.00
19,970.00
15
Common stock, $4 par
147,000.00
96,000.00
16
Paid-in capital: Excess of issue price over par—common stock
417,200.00
279,600.00
17
Retained earnings
1,305,170.00
1,202,760.00
18
Total liabilities and stockholders’ equity
$2,361,380.00
$2,056,690.00
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
$625,080.00
$586,430.00
4
Accounts receivable (net)
228,260.00
209,470.00
5
Inventories
641,070.00
616,400.00
6
Investments
0.00
240,170.00
7
Land
327,640.00
0.00
8
Equipment
705,000.00
552,830.00
9
Accumulated depreciation-equipment
(165,670.00)
(148,610.00)
10
Total assets
$2,361,380.00
$2,056,690.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$425,090.00
$405,900.00
13
Accrued expenses payable (operating expenses)
43,140.00
52,460.00
14
Dividends payable
23,780.00
19,970.00
15
Common stock, $4 par
147,000.00
96,000.00
16
Paid-in capital: Excess of issue price over par—common stock
417,200.00
279,600.00
17
Retained earnings
1,305,170.00
1,202,760.00
18
Total liabilities and stockholders’ equity
$2,361,380.00
$2,056,690.00
Explanation / Answer
Statement of cash flow cash from operating activities Net income for the year 197,450 Adjustment to reconcile net income to cash from operating activities Depreciation expense 17060 Gain on sale of investments -39980 increase in accounts receivable -18790 increase in inventories -24670 increase in accounts payable 19190 Decrease in accrued expenses payable -9320 Net cash flow from operating activities 140,940 Cash from investing activities cash from sale of investment 280,150 cash used for purchase of land -327,640 cash used for purchase of Equipment -152170 Cash used by investing activities -199,660 Cash from financing activities cash from stock issue 188600 cash dividends (95040+19970-23780) -91230 Cash from financing activities 97,370 Net increase in cash 38,650 Cash at the beginning 586,430 cash at year end 625,080