The comparative balance sheet of Whitman Co. at December 31, 2016 and 2015, is a
ID: 2557202 • Letter: T
Question
The comparative balance sheet of Whitman Co. at December 31, 2016 and 2015, is as follows:
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$917,690.00
$964,930.00
4
Accounts receivable (net)
?828,620.00
762,860.00
5
Inventories
1,267,970.00
1,162,780.00
6
Prepaid expenses
29,050.00
36,010.00
7
Land
315,250.00
480,690.00
8
Buildings
1,462,990.00
901,470.00
9
Accumulated depreciation-buildings
(409,170.00)
(382,690.00)
10
Equipment
511,480.00
453,680.00
11
Accumulated depreciation-equipment
(142,100.00)
(159,400.00)
12
Total assets
$4,781,780.00
$4,220,330.00
13
Liabilities and Stockholders’ Equity
14
Accounts payable (merchandise creditors)
$923,380.00
$958,540.00
15
Bonds payable
269,000.00
0.00
16
Common stock, $25 par
323,000.00
118,000.00
17
Paid-in capital: Excess of issue price over par—common stock
771,200.00
558,000.00
18
Retained earnings
2,495,200.00
2,585,790.00
19
Total liabilities and stockholders’ equity
$4,781,780.00
$4,220,330.00
The noncurrent asset, noncurrent liability, and stockholders’ equity accounts for 2016 are as follows:
ACCOUNT Land
ACCOUNT Buildings
ACCOUNT Accumulated Depreciation––Buildings
ACCOUNT Equipment
ACCOUNT Accumulated Depreciation ––Equipment
ACCOUNT Bonds Payable
ACCOUNT Common Stock $25 par
ACCOUNT Paid-In Capital in Excess of Par––Common Stock
ACCOUNT Retained Earnings
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.
Labels and Amount Descriptions
Statement of Cash Flows
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.
Whitman Co.
Statement of Cash Flows
1
Cash flows from operating activities:
2
3
Adjustments to reconcile net loss to net cash flow from operating activities:
4
5
6
Changes in current operating assets and liabilities:
7
8
9
10
11
12
13
Cash flows from investing activities:
14
15
16
17
18
19
Cash flows from financing activities:
20
21
22
23
24
25
Cash at the beginning of the year
26
Cash at the end of the year
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$917,690.00
$964,930.00
4
Accounts receivable (net)
?828,620.00
762,860.00
5
Inventories
1,267,970.00
1,162,780.00
6
Prepaid expenses
29,050.00
36,010.00
7
Land
315,250.00
480,690.00
8
Buildings
1,462,990.00
901,470.00
9
Accumulated depreciation-buildings
(409,170.00)
(382,690.00)
10
Equipment
511,480.00
453,680.00
11
Accumulated depreciation-equipment
(142,100.00)
(159,400.00)
12
Total assets
$4,781,780.00
$4,220,330.00
13
Liabilities and Stockholders’ Equity
14
Accounts payable (merchandise creditors)
$923,380.00
$958,540.00
15
Bonds payable
269,000.00
0.00
16
Common stock, $25 par
323,000.00
118,000.00
17
Paid-in capital: Excess of issue price over par—common stock
771,200.00
558,000.00
18
Retained earnings
2,495,200.00
2,585,790.00
19
Total liabilities and stockholders’ equity
$4,781,780.00
$4,220,330.00
Explanation / Answer
Whitman Co.
Statement of Cash Flows
For the year ended December 31, 2016
$ $ Cash Flows from Operating Activities Net Loss - 58,980 Adjustments to reconcile net loss to net cash flows from operating activities Depreciation Expense: Buildings 26,480 Depreciation Expense: Equipment 28,970 Loss on Sale of Land 12,040 Increase in Accounts Receivable - 65,760 Increase in Inventories - 1,05,190 Decrease in Prepaid Expenses 6,960 Decrease in Accounts Payable - 35,160 - 131,660 Net cash used in Operating Activities - 190,640 Cash Flows from Investing Activities Cash received from land sold 153,400 Cash paid for acquisition of building - 561,520 Cash paid for purchase of equipment - 104,070 Net cash used in Investing Activities - 512,190 Cash Flows from Financing Activities Cash received from issuance of bonds payable 269,000 Cash received from issuance of common stock 418,200 Cash paid for dividends - 31,610 Net cash flows from Financing Activities 655,590 Decrease in Cash - 47,240 Cash at the beginning of the year 964,930 Cash at the end of the year 917,690