The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is
ID: 2529455 • Letter: T
Question
The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is shown as follows:
Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:
The investments were sold for $136,290 cash.
Equipment and land were acquired for cash.
There were no disposals of equipment during the year.
The common stock was issued for cash.
There was a $83,850 credit to Retained Earnings for net income.
There was a $46,800 debit to Retained Earnings for cash dividends declared.
Required:
Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
Dec. 31, 20Y3 Dec. 31, 20Y2 Assets Cash $306,450 $282,770 Accounts receivable (net) 111,020 101,560 Inventories 313,390 300,700 Investments 0 116,490 Land 160,740 0 Equipment 345,770 265,850 Accumulated depreciation—equipment (80,950) (71,690) Total assets $1,156,420 $995,680 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $209,310 $196,150 Accrued expenses payable (operating expenses) 20,820 25,890 Dividends payable 11,560 8,960 Common stock, $10 par 62,450 48,790 Paid-in capital: Excess of issue price over par-common stock 234,750 135,410 Retained earnings 617,530 580,480 Total liabilities and stockholders’ equity $1,156,420 $995,680Explanation / Answer
Livers Inc Statement of Cashflows For the year Ended December 31, 20Y3 Cash flows from operating activities Net Income $ 83,850 Adjustments to reconcile net income to : Depreciation expense $ 9,260 80950-71690 Gain on sale of investment $ (19,800) 116490-136290 Changes in current operating assets and liabiltiies Increase in accounts receivable $ (9,460) 101560-111020 Increase in inventory $ (12,690) 300700-313390 Increase in accounts payable $ 13,160 209310-196150 Decrease in accrued expenses payable $ (5,070) 20820-25890 $ (24,600) Net cash flow from operating activities $ 59,250 Cash flows from investing activities Cash paid for Purchase of equipment $ (79,920) 265850-345770 Cash paid for Purchase of land $ (160,740) Cash received from sale investment $ 136,290 Net cash used for investing activities $ (104,370) Cash flows from financing activities Cash paid for dividend $ (44,200) 11560-8960-46800 Cash proceeds from issue of common stock $ 113,000 62450-48790+234750-135410 Net cash flow from financing activities $ 68,800 Net increase in cash and cash equivalents $ 23,680 Cash and cash equivalents at beginning of period $ 282,770 Cash and cash equivalents at end of period $ 306,450