Crane Company\'s balance sheet accounts as of December 31, 2018 and 2017 and inf

Question

Crane Company's balance sheet accounts as of December 31, 2018 and 2017 and information relating to 2018 activities are presented below.

$6454000

$4256000

$6454000

$4256000

Information relating to 2018 activities:

• Net income for 2018 was $1480000.
• Cash dividends of $598000 were declared and paid in 2018.
• Equipment costing $980000 and having a carrying amount of $318000 was sold in 2018 for $358000.
• A long-term investment was sold in 2018 for $318000. There were no other transactions affecting long-term investments in 2018.
• 20000 shares of common stock were issued in 2018 for $25 a share.
• Short-term investments consist of treasury bills maturing on 6/30/19.

Net cash provided by Crane’s 2018 operating activities was

       December 31,           2018        2017    Assets Cash $ 438000 $   198000 Short-term investments    598000 — Accounts receivable (net) 1000000 1000000 Inventory 1360000 1180000 Long-term investments   398000   598000 Plant assets 3380000 1980000 Accumulated depreciation    (898000)    (898000) Patent     178000     198000       Total assets

$6454000

$4256000

Liabilities and Stockholders' Equity Accounts payable and accrued liabilities $1640000 $1420000 Notes payable (nontrade)      578000 — Common stock, $10 par 1580000 1380000 Additional paid-in capital     798000     498000 Retained earnings     1858000     958000       Total liabilities and stockholders' equity

$6454000

$4256000

Explanation / Answer

Calculation of net cash provided by Crane’s 2018 operating activities Net Income $1,480,000.00 Depreciation Expense $662,000.00 Gain on sale of equipment -$40,000.00 Gain on sale of long term investment -$118,000.00 Changes in working capital Increase in short term investment -$598,000.00 Increase in Inventory -$180,000.00 Increase in Accounts Payable and accrued liabilities $220,000.00 -$54,000.00 Net Cash provided by operating activities $1,426,000.00 Working Gain on sale of equipment Sale value of equipment $358,000.00 Less : Carrying amount of equipment $318,000.00 Gain on sale of equipment $40,000.00 Gain on sale of investment Sale value of investment $318,000.00 Less : Book value of investment $200,000.00 Gain on sale of investment $118,000.00 Depreciation Expense Accumulated depreciation as on 2018 $898,000.00 Less : Accumulated depreciation as on 2017 $898,000.00 Add : Accumulated depreciation on sold equipment $662,000.00 Depreciation Expense $662,000.00

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