The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y
ID: 2557996 • Letter: T
Question
The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:
1
Dec. 31, 20Y8
Dec. 31, 20Y7
2
Assets
3
Cash
$146,480.00
$179,640.00
4
Accounts receivable (net)
225,010.00
241,920.00
5
Merchandise inventory
321,600.00
298,870.00
6
Prepaid expenses
13,030.00
10,420.00
7
Equipment
654,380.00
537,900.00
8
Accumulated depreciation-equipment
(169,970.00)
(133,130.00)
9
Total assets
$1,190,530.00
$1,135,620.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$250,960.00
$236,720.00
12
Mortgage note payable
????0.00
335,410.00
13
Common stock, $10 par
75,000.00
25,000.00
14
Paid-in capital: Excess of issue price over par—common stock
440,000.00
310,000.00
15
Retained earnings
424,570.00
228,490.00
16
Total liabilities and stockholders’ equity
$1,190,530.00
$1,135,620.00
Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 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. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
1
Dec. 31, 20Y8
Dec. 31, 20Y7
2
Assets
3
Cash
$146,480.00
$179,640.00
4
Accounts receivable (net)
225,010.00
241,920.00
5
Merchandise inventory
321,600.00
298,870.00
6
Prepaid expenses
13,030.00
10,420.00
7
Equipment
654,380.00
537,900.00
8
Accumulated depreciation-equipment
(169,970.00)
(133,130.00)
9
Total assets
$1,190,530.00
$1,135,620.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$250,960.00
$236,720.00
12
Mortgage note payable
????0.00
335,410.00
13
Common stock, $10 par
75,000.00
25,000.00
14
Paid-in capital: Excess of issue price over par—common stock
440,000.00
310,000.00
15
Retained earnings
424,570.00
228,490.00
16
Total liabilities and stockholders’ equity
$1,190,530.00
$1,135,620.00
Explanation / Answer
Cash flow indirect method Cash flow from operating activities Net income 348560 Adjustments to reconcile the net income Depreciation expense 82480 Changes in current asset and liabilities decrease in prepaid expense -2610 decrease in accounts receivable 16910 Increase in Inventory -22730 Increase in accounts payable 14240 88290 Cash flow from operating activities 436850 Cash flow from Investing activities Equipment purchased -162120 Cash flow from Investing activities -162120 Cash flow from Financing activities Bank loan repaid -335410 Common stock 100000 Paid in capital in excess of par 80000 Dividend paid -152480 Cash flow from Financing activities -307890 Net Cash and cash equivalent -33160 Add Beginning cash and cash equivalent 179640 Ending cash and cash equivalent 146480