The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and
ID: 2542700 • Letter: T
Question
The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows:
1
Dec. 31, 20Y6
Dec. 31, 20Y5
2
Assets
3
Cash
$642,720.00
$679,910.00
4
Accounts receivable (net)
567,220.00
547,910.00
5
Inventories
1,010,310.00
982,080.00
6
Investments
0.00
240,170.00
7
Land
519,640.00
0.00
8
Equipment
879,880.00
679,710.00
9
Accumulated depreciation
(243,670.00)
(201,010.00)
10
Total assets
$3,376,100.00
$2,928,770.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$772,410.00
$749,340.00
13
Accrued expenses payable (operating expenses)
64,300.00
70,620.00
14
Dividends payable
8,580.00
7,170.00
15
Common stock, $2 par
56,000.00
32,000.00
16
Paid-in capital: Excess of issue price over par—common stock
408,000.00
192,000.00
17
Retained earnings
2,066,810.00
1,877,640.00
18
Total liabilities and stockholders’ equity
$3,376,100.00
$2,928,770.00
The income statement for the year ended December 31, 20Y6, is as follows:
1
Sales
$5,978,490.00
2
Cost of goods sold
2,451,600.00
3
Gross profit
$3,526,890.00
4
Operating expenses:
5
Depreciation expense
$42,660.00
6
Other operating expenses
3,100,820.00
7
Total operating expenses
3,143,480.00
8
Operating income
$383,410.00
9
Other expense:
10
Loss on sale of investments
(64,020.00)
11
Income before income tax
$319,390.00
12
Income tax expense
103,180.00
13
Net income
$216,210.00
Additional data obtained from an examination of the accounts in the ledger for 20Y6 are as follows:
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.
1
Dec. 31, 20Y6
Dec. 31, 20Y5
2
Assets
3
Cash
$642,720.00
$679,910.00
4
Accounts receivable (net)
567,220.00
547,910.00
5
Inventories
1,010,310.00
982,080.00
6
Investments
0.00
240,170.00
7
Land
519,640.00
0.00
8
Equipment
879,880.00
679,710.00
9
Accumulated depreciation
(243,670.00)
(201,010.00)
10
Total assets
$3,376,100.00
$2,928,770.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$772,410.00
$749,340.00
13
Accrued expenses payable (operating expenses)
64,300.00
70,620.00
14
Dividends payable
8,580.00
7,170.00
15
Common stock, $2 par
56,000.00
32,000.00
16
Paid-in capital: Excess of issue price over par—common stock
408,000.00
192,000.00
17
Retained earnings
2,066,810.00
1,877,640.00
18
Total liabilities and stockholders’ equity
$3,376,100.00
$2,928,770.00
Explanation / Answer
Note: Please confirm exact wordings for text entries from the Labels and Amount Descriptions list since the same is not provided with the question.
Workings:
CANACE PRODUCTS INC Statement of Cash Flows For the Year Ended December 31, 20Y6 (Direct Method) Cash Flows from Operating Activities: Cash receipts: Cash received from customers 5959180 Cash payments: Cash paid for merchandise -2456760 Cash paid for operating expenses -3107140 Cash paid for income taxes -103180 -5667080 Net cash provided by operating activities 292100 Cash Flows from Investing Activities: Proceeds from sale of investments 176150 Purchase of land -519640 Purchase of equipment (879880 - 679710) -200170 Net cash used by investing activities -543660 Cash Flows from Financing Activities: Issuance of Common stock 240000 Payment of cash dividends -25630 Net cash provided by financing activities 214370 Net decrease in cash -37190 Cash, December 31, 20Y5 679910 Cash, December 31, 20Y6 642720