The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y
ID: 2560891 • 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
$80,000.00
$100,000.00
4
Accounts receivable (net)
275,000.00
300,000.00
5
Inventories
510,000.00
400,000.00
6
Prepaid expenses
15,000.00
10,000.00
7
Equipment
1,070,000.00
750,000.00
8
Accumulated depreciation-equipment
(200,000.00)
(160,000.00)
9
Total assets
$1,750,000.00
$1,400,000.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$100,000.00
$90,000.00
12
Mortgage note payable
0.00
400,000.00
13
Common stock, $10 par
600,000.00
200,000.00
14
Paid-in capital: Excess of issue price over par—common stock
300,000.00
100,000.00
15
Retained earnings
750,000.00
610,000.00
16
Total liabilities and stockholders’ equity
$1,750,000.00
$1,400,000.00
Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:
a. Net income, $190,000.
b. Depreciation reported on the income statement, $115,000.
c. Equipment was purchased at a cost of $395,000 and fully depreciated equipment costing $75,000 was discarded, with no salvage realized.
d. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.
e. 40,000 shares of common stock were issued at $15 for cash.
f. Cash dividends declared and paid, $50,000.
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. Enter amounts that represent cash outflows as negative numbers using a minus sign.
Explanation / Answer
Yellow Dog Enterprises
Statement of Cashflow
For the year ending December 31,2018
Particulars
Amount
1) Cashflow from operating activities
Net Income
Depreciation on equipments
(Increase)/Decrease in current assets
Account Receivable
Inventories
Prepaid Expenses
Increase/(Decrease) in Current Liability
Accounts Payable
Net cash provided by operating activities
2) Cashflow from Investing activities
Purchase of equipment
Net cash used in Investing activities
3) Cashflow from Financing activities
Proceeds from common stock issue
Note Payable paid
Dividend Paid
Net cash provided in Financing activities
Net Increase or Decrease in Cash
Beginning Cash balance
Ending Cash Balance
$190,000
$ 115,000
$ 25,000
-$110,000
-$ 5,000
$10,000
$ 225,000
-$ 395,000
-$ 395,000
$ 600,000
-$ 400,000
-$ 50,000
$ 150,000
-$20,000
$ 100,000
$ 80,000
Particulars
Amount
1) Cashflow from operating activities
Net Income
Depreciation on equipments
(Increase)/Decrease in current assets
Account Receivable
Inventories
Prepaid Expenses
Increase/(Decrease) in Current Liability
Accounts Payable
Net cash provided by operating activities
2) Cashflow from Investing activities
Purchase of equipment
Net cash used in Investing activities
3) Cashflow from Financing activities
Proceeds from common stock issue
Note Payable paid
Dividend Paid
Net cash provided in Financing activities
Net Increase or Decrease in Cash
Beginning Cash balance
Ending Cash Balance
$190,000
$ 115,000
$ 25,000
-$110,000
-$ 5,000
$10,000
$ 225,000
-$ 395,000
-$ 395,000
$ 600,000
-$ 400,000
-$ 50,000
$ 150,000
-$20,000
$ 100,000
$ 80,000