Check Figure: Cash paid in inventory ($32,386) Below are balance sheet and incom
ID: 2560869 • Letter: C
Question
Check Figure: Cash paid in inventory ($32,386)
Below are balance sheet and income statement data for Blue Panel Corporation. (Note: For the balance sheet data, the end-of-year information is in the left column.) Balance Sheet 2015 2014 Cash . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $8,261 $1,506 Investment securities (available for sale) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 300 250 Accounts receivable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,200 1,365 Paid-in capital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,200 6,000 Inventory . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,874 5,168 Prepaid selling and administrative expenses . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208 224 Retained earnings (deficit) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8,768 -2,042 Accumulated depreciation . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3,200 2,780 Accounts payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 370 450 Unearned revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 110 170 Income taxes payable . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 78 54 Other long-term liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 490 185 Property, plant, and equipment . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 12,000 8,400 Long-term debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7,952 9,816 Accumulated other comprehensive income (credit balance) . . . . . . . . . . . . 50 0 Intangible assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 375 500 Income Statement (for 2015) Sales . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $57,860 Cost of goods sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $32,600 Loss on sale of property, plant, and equipment. . . . . . . . . . . . . . . . . . . . . . . . . . . 80 Selling and administrative expenses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,550 Amortization expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 125 Depreciation expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,355 Income tax expense. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2,400 Total expenses and losses. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 44,110 Net income. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $13,750 Additional information for Blue Panel Corporation is as follows: (a) Property, plant, and equipment with an original historical cost of $2,100 was sold during 2015. (b) All accounts payable relate to inventory purchases. (c) The “Other long-term liabilities” item is Blue Panel’s pension liability. Pension expense is reported as part of selling and administrative expenses. (d) During 2015, Blue Panel issued shares of common stock to an investor in exchange for property, plant, and equipment valued at $800. (e) The accumulated other comprehensive income relates solely to the available-for-sale investment securities. Instructions: Prepare a complete statement of cash flows for 2015 for Blue Panel Corporation. Use the DIRECT method for reporting cash flows from operating activities.Explanation / Answer
Cash paid in inventory : $ 32,386 is correct.
Total inventory purchases during 2015 is as under:
Purchases = Cost of Sales + Closing Stock - Opening Stock
Total Purchases of inventory = $ 32,600+$4,874-$5,168 = $ 32,306
Total payment made = Opening Accounts Payable + Purchases made - Closing Accounts Payable
Total payment made = $ 450 + $ 32,306 - $ 370 = $ 32,386