The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is
ID: 2532342 • Letter: T
Question
The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is shown as follows:
1
Dec. 31, 20Y3
Dec. 31, 20Y2
2
Assets
3
Cash
$625,680.00
$586,230.00
4
Accounts receivable (net)
228,100.00
208,850.00
5
Inventories
640,910.00
617,650.00
6
Investments
0.00
240,620.00
7
Land
328,090.00
0.00
8
Equipment
704,540.00
553,320.00
9
Accumulated depreciation-equipment
(166,310.00)
(147,840.00)
10
Total assets
$2,361,010.00
$2,058,830.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$425,280.00
$404,550.00
13
Accrued expenses payable (operating expenses)
41,990.00
52,020.00
14
Dividends payable
24,190.00
20,170.00
15
Common stock, $4 par
142,000.00
106,000.00
16
Paid-in capital: Excess of issue price over par—common stock
416,700.00
279,900.00
17
Retained earnings
1,310,850.00
1,196,190.00
18
Total liabilities and stockholders’ equity
$2,361,010.00
$2,058,830.00
Additional data obtained from an examination of the accounts in the ledger for 20Y3 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. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
Labels and Amount Descriptions
Net loss
The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is shown as follows:
1
Dec. 31, 20Y3
Dec. 31, 20Y2
2
Assets
3
Cash
$625,680.00
$586,230.00
4
Accounts receivable (net)
228,100.00
208,850.00
5
Inventories
640,910.00
617,650.00
6
Investments
0.00
240,620.00
7
Land
328,090.00
0.00
8
Equipment
704,540.00
553,320.00
9
Accumulated depreciation-equipment
(166,310.00)
(147,840.00)
10
Total assets
$2,361,010.00
$2,058,830.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$425,280.00
$404,550.00
13
Accrued expenses payable (operating expenses)
41,990.00
52,020.00
14
Dividends payable
24,190.00
20,170.00
15
Common stock, $4 par
142,000.00
106,000.00
16
Paid-in capital: Excess of issue price over par—common stock
416,700.00
279,900.00
17
Retained earnings
1,310,850.00
1,196,190.00
18
Total liabilities and stockholders’ equity
$2,361,010.00
$2,058,830.00
Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:
A. The investments were sold for $279,190 cash. B. Equipment and land were acquired for cash. C. There were no disposals of equipment during the year. D. The common stock was issued for cash. E. There was a $211,240 credit to Retained Earnings for net income. F. There was a $96,580 debit to Retained Earnings for cash dividends declared.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. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
Labels and Amount Descriptions
Cash paid for dividends Cash paid for merchandise Cash paid for purchase of equipment Cash paid for purchase of land Cash received from customers Cash received from sale of common stock Cash received from sale of investments Change in cash December 31, 20Y3 Decrease in accounts payable Decrease in accounts receivable Decrease in accrued expenses payable Decrease in inventories Depreciation For the Year Ended December 31, 20Y3 Gain on sale of investments Increase in accounts payable Increase in accounts receivable Increase in accrued expenses payable Increase in inventories Loss on sale of investments Net cash flow from operating activities Net cash flow used for operating activities Net cash flow from investing activities Net cash flow used for investing activities Net cash flow from financing activities Net cash flow used for financing activities Net incomeNet loss
Explanation / Answer
The cash flow statement is prepared as below:
Livers Inc. Cash Flow Statement - Indirect Method Cash Flow from Operating Activities Net Income 211,240 Add Depreciation (166,310 - 147,840) 18,470 Increase in Accounts Payable (425,280 - 404,550) 20,730 Less Increase in Accounts Receivable (228,100 - 208,850) -19,250 Increase in Inventories (640,910 - 617,650) -23,260 Decrease in Accrued Expenses Payable (52,020 - 41,990) -10,030 Gain on Sale of Investments (279,190 - 240,620) -38,570 Net Cash Flow from Operating Activities (A) 159,330 Cash Flow from Investing Activities Cash Received from Sale of Investments 279,190 Cash Paid for Purchase of Land -328,090 Cash Paid for Purchase of Equipment (704,540 - 553,320) -151,220 Net Cash Flow Used for Investing Activities (B) -200,120 Cash Flow from Financing Activities Cash Received from Sale of Common Stock (142,000 + 416,700 - 106,000 - 279,900) 172,800 Cash Paid for Dividends (20,170 + 96,580 - 24,190 ) -92,560 Net Cash Flow from Financing Activities (C) 80,240 Net Increase/Decrease in Cash or Change in Cash (A+B+C) $39,450 Add Cash Balance, Dec. 31, 20Y2 $586,230 Cash Balance, Dec. 31, 20Y3 (As provided in the question) $625,680