Boca Inc. Balance Sheets December 31 Assets 2018 2017 Cash 60,800 48,400 Account
ID: 2539788 • Letter: B
Question
Boca Inc.
Balance Sheets
December 31
Assets
2018
2017
Cash
60,800
48,400
Accounts Receivable
87,800
38,000
Inventory
102,850
112,500
Prepaid Expenses
28,400
26,000
Long-term Investments
138,000
109,000
Plant Assets
347,000
242,500
Accumulated depreciation
(50,000)
(52,000)
Total
714,850
524,400
Liabilities and Stockholders' Equity
Accounts Payable
67,300
72,000
Accrued Expenses Payable
21,000
13,500
Dividends Payable
3,000
-
Bonds Payable
170,000
146,000
Common Stock
262,000
175,000
Retained Earnings
191,550
117,900
Total
714,850
524,400
Additional Information:
1. Old plant assets having an original cost of $57,500 and accumulated depreciation of $48,500 were sold for $1,500 cash.
2. A new plant asset was purchased directly in exchange for common stock valued at $42,000.
3. New bonds were issued at par for $60,000.
4. 2018 Net income was $154,480.
5. A $1,000 prior period adjustment was recorded in 2018 to correct an understatement of depreciation in 2015. The 2017 balance sheet is appropriately restated.
6. Accounting for the long-term investments was appropriately using the equity method. Boca’s share of investee net income was $20,000. Other changes in Long-term investments were caused by additional stock purchases. No dividends were received.
Required
1. Prepare a 2018 statement of cash flows using the indirect method. Use the textbook format (pages 1,339, 1,342, 1,345). Do not submit supporting computations.
Boca Inc.
Balance Sheets
December 31
Assets
2018
2017
Cash
60,800
48,400
Accounts Receivable
87,800
38,000
Inventory
102,850
112,500
Prepaid Expenses
28,400
26,000
Long-term Investments
138,000
109,000
Plant Assets
347,000
242,500
Accumulated depreciation
(50,000)
(52,000)
Total
714,850
524,400
Liabilities and Stockholders' Equity
Accounts Payable
67,300
72,000
Accrued Expenses Payable
21,000
13,500
Dividends Payable
3,000
-
Bonds Payable
170,000
146,000
Common Stock
262,000
175,000
Retained Earnings
191,550
117,900
Total
714,850
524,400
Additional Information:
1. Old plant assets having an original cost of $57,500 and accumulated depreciation of $48,500 were sold for $1,500 cash.
2. A new plant asset was purchased directly in exchange for common stock valued at $42,000.
3. New bonds were issued at par for $60,000.
4. 2018 Net income was $154,480.
5. A $1,000 prior period adjustment was recorded in 2018 to correct an understatement of depreciation in 2015. The 2017 balance sheet is appropriately restated.
6. Accounting for the long-term investments was appropriately using the equity method. Boca’s share of investee net income was $20,000. Other changes in Long-term investments were caused by additional stock purchases. No dividends were received.
Required
1. Prepare a 2018 statement of cash flows using the indirect method. Use the textbook format (pages 1,339, 1,342, 1,345). Do not submit supporting computations.
Explanation / Answer
Boca Inc Statement of Cash Flows (Indirect Method) For the Year ended Dec 31, 2018 Cash Flow from opearating activities: Net Income 154,480.00 Add/(Less) non cash effects on operating activities Depreciation expense - Equipment 45,500.00 Loss on sale of Plant 7,500.00 Inrease in Accounts Receivables (49,800.00) Decrease in Inventory 9,650.00 Increase in Prepaid Expenses (2,400.00) Decrease in Accounts Payable (4,700.00) Increase in Accrued Expenses Payable 7,500.00 13,250.00 Net Cash provided by operating activities 167,730.00 Cash flow from Investing Activities Purchase of Plant (120,000.00) Sale of Plant 1,500.00 Purchase of long Term Liabilities (9,000.00) Net Cash used by Investing activities (127,500.00) Cash Flow from Financing Activities Issue of Bonds Payable 60,000.00 Payment of Bonds Payable (36,000.00) Issue of Common stock 45,000.00 Cash Dividend Paid (96,830.00) Net Cash uesd by Financing activities (27,830.00) Net Increase / (Decrease) in Cash 12,400.00 Cash balance at the Dec 31, 2017 48,400.00 Cash balance at the end - Dec 31, 2018 60,800.00 Plant Assets Particulars Amt Particulars Amt To Balance B/f 242,500.00 By Cash 1,500.00 To Common stock 42,000.00 By Depreciation 48,500.00 To Cash 120,000.00 By Loss on sale of Plant 7,500.00 By Balance C/f 347,000.00 404,500.00 404,500.00 Accumulated Dep. Particulars Amt Particulars Amt To Plant & Equipment 48,500.00 By Balance b/f 52,000.00 To Balance C/f 50,000.00 By Prior Period djustment 1,000.00 By Dep. Exp. (Bal. Fig.) 45,500.00 98,500.00 98,500.00 Retained Earnings Particulars Amt Particulars Amt To Prior Period adjustment 1,000.00 By Balance b/f 117,900.00 To Cash Dividend (Bal. Fig) 99,830.00 By Net Income 154,480.00 To Balance C/f 191,550.00 By Equity Income - LTCG 20,000.00 291,380.00 292,380.00 Dividend Payable Particulars Amt Particulars Amt To Dividend Paid (Bal. fig.) 96,830.00 By Balance b/f - By Retained Earnings 99,830.00 To Balance C/f 3,000.00 3,000.00 99,830.00