The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20
ID: 2539303 • Letter: T
Question
The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:
1
Dec. 31, 20Y2
Dec. 31, 20Y1
2
Assets
3
Cash
$485.00
$163.00
4
Accounts receivable (net)
285.00
198.00
5
Inventories
170.00
112.00
6
Land
395.00
454.00
7
Equipment
220.00
180.00
8
Accumulated depreciation-equipment
(58.00)
(32.00)
9
Total assets
$1,497.00
$1,075.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$174.00
$155.00
12
Dividends payable
28.00
13
Common stock, $1 par
105.00
48.00
14
Paid-in capital: Excess of issue price over par—common stock
245.00
123.00
15
Retained earnings
945.00
749.00
16
Total liabilities and stockholders’ equity
$1,497.00
$1,075.00
The following additional information is taken from the records:
Required:
Was the net cash flow from operations for Olson-Jones Industries Inc. more or less than net income? What is the source of this difference?
Net loss
A. 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.
Olson-Jones Industries 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
6
Changes in current operating assets and liabilities:
7
8
9
10
11
Cash flows from (used for) investing activities:
12
13
14
15
Cash flows from (used for) financing activities:
16
17
18
19
20
Cash at the beginning of the year
21
Cash at the end of the year
B. Was the net cash flow from operations for Olson-Jones Industries Inc. more or less than net income? What is the source of this difference?
Net cash flow from operations was than net income.
The source(s) of the difference are: Check all that apply.
Depreciation expense
Sale of common stock
Changes in current operating assets and liabilities
Purchase of equipment
Gain on the sale of land
Dividends paid
1
Dec. 31, 20Y2
Dec. 31, 20Y1
2
Assets
3
Cash
$485.00
$163.00
4
Accounts receivable (net)
285.00
198.00
5
Inventories
170.00
112.00
6
Land
395.00
454.00
7
Equipment
220.00
180.00
8
Accumulated depreciation-equipment
(58.00)
(32.00)
9
Total assets
$1,497.00
$1,075.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$174.00
$155.00
12
Dividends payable
28.00
13
Common stock, $1 par
105.00
48.00
14
Paid-in capital: Excess of issue price over par—common stock
245.00
123.00
15
Retained earnings
945.00
749.00
16
Total liabilities and stockholders’ equity
$1,497.00
$1,075.00
Explanation / Answer
Olson-Jones Industries Inc. Statement of Cash Flows For the Year Ended December 31, 20Y2 1 Cash flows from operating activities: 2 Adjustments to reconcile net income to net cash flow from operating activities: 3 Net income 294 4 Depreciation 26 5 Gain on sale of land -64 6 Changes in current operating assets and liabilities: 7 Increase in accounts receivable -87 8 Increase in inventories -58 9 Increase in accounts payable 19 10 Net cash flow from operating activities 130 11 Cash flows from (used for) investing activities: 12 Cash used for purchase of equipment -40 13 Cash from sale of land 123 14 Net cash flow from investing activities 83 15 Cash flows from (used for) financing activities: 16 Cash from sale of common stock 179 Dividend Paid -70 17 Net cash flow from financing activities 109 18 Increase in cash 322 19 Cash at the beginning of the year 163 20 Cash at the end of the year 485 Gain on sale of land Sales 123 Cost of land Sold =454-395 59 Gain on sale of land 64