The comparative balance sheet of Del Ray Enterprises Inc. at December 31, 2016 a
ID: 2537983 • Letter: T
Question
The comparative balance sheet of Del Ray Enterprises Inc. at December 31, 2016 and 2015, is as follows:
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$146,190.00
$179,070.00
4
Accounts receivable (net)
224,940.00
241,100.00
5
Merchandise inventory
322,390.00
299,700.00
6
Prepaid expenses
12,670.00
9,430.00
7
Equipment
655,160.00
537,730.00
8
Accumulated depreciation-equipment
(170,790.00)
(131,900.00)
9
Total assets
$1,190,560.00
$1,135,130.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$250,640.00
$237,300.00
12
Mortgage note payable
0.00
336,600.00
13
Common stock, $10 par
73,000.00
23,000.00
14
Paid-in capital: Excess of issue price over par—common stock
500,000.00
310,000.00
15
Retained earnings
366,920.00
228,230.00
16
Total liabilities and stockholders’ equity
$1,190,560.00
$1,135,130.00
Additional data obtained from the income statement and 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 and enter in the order listed on the Instructions page.
Net loss
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 sectionand enter in the order listed on the Instructions page.
Del Ray Enterprises Inc.
Statement of Cash Flows
1
Cash flows from operating activities:
2
3
Adjustments to reconcile net income to net cash flow from operating activities:
4
5
Changes in current operating assets and liabilities:
6
7
8
9
10
11
12
Cash flows from investing activities:
13
14
15
16
Cash flows from financing activities:
17
18
19
20
21
22
Cash at the beginning of the year
23
Cash at the end of the year
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$146,190.00
$179,070.00
4
Accounts receivable (net)
224,940.00
241,100.00
5
Merchandise inventory
322,390.00
299,700.00
6
Prepaid expenses
12,670.00
9,430.00
7
Equipment
655,160.00
537,730.00
8
Accumulated depreciation-equipment
(170,790.00)
(131,900.00)
9
Total assets
$1,190,560.00
$1,135,130.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$250,640.00
$237,300.00
12
Mortgage note payable
0.00
336,600.00
13
Common stock, $10 par
73,000.00
23,000.00
14
Paid-in capital: Excess of issue price over par—common stock
500,000.00
310,000.00
15
Retained earnings
366,920.00
228,230.00
16
Total liabilities and stockholders’ equity
$1,190,560.00
$1,135,130.00
Explanation / Answer
Statement of Cash Flows AS ON DECEMBER 31 2016 Amount in $ Amount in $ Net income $ 2,91,590 Cash flows from operating activities Adjustments for: Depreciation $ 83,790 (Increase) / Decrease in Account receivables $ 16,160 Inventory Decrease / (Increase) $ -22,690 Accounts payable Increase / ( Decrese) $ 13,340 Prepaid expenses $ -3,240 $ 87,360 Net cash from operating activities $ 3,78,950 Cash flows from investing activities Purchase of Equipment $ -1,62,330 Net cash used in investing activities $ -1,62,330 Cash flows from Financing activities Issue of Common Stock $ 2,40,000 Repayment of note payable $ -3,36,600 Dividend Paid $ -1,52,900 Net cash used in financing activities $ -2,49,500 Net increase in cash and cash equivalents $ -32,880 Add :Cash and cash equivalents at beginning of period $ 1,79,070 Cash and cash equivalents at end of period $ 1,46,190 Equipment opening Balance = $ 5,37,730 Less: Discarded $ 44,900 Add: Purchases $ 1,62,330 Closing balance $ 6,55,160