The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is
ID: 2571850 • Letter: T
Question
The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is shown as follows:
1
Dec. 31, 20Y3
Dec. 31, 20Y2
2
Assets
3
Cash
$155,000.00
$150,000.00
4
Accounts receivable (net)
450,000.00
400,000.00
5
Inventories
770,000.00
750,000.00
6
Investments
0.00
100,000.00
7
Land
500,000.00
0.00
8
Equipment
1,400,000.00
1,200,000.00
9
Accumulated depreciation-equipment
(600,000.00)
(500,000.00)
10
Total assets
$2,675,000.00
$2,100,000.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$340,000.00
$300,000.00
13
Accrued expenses payable (operating expenses)
45,000.00
50,000.00
14
Dividends payable
30,000.00
25,000.00
15
Common stock, $4 par
700,000.00
600,000.00
16
Paid-in capital: Excess of issue price over par—common stock
200,000.00
175,000.00
17
Retained earnings
1,360,000.00
950,000.00
18
Total liabilities and stockholders’ equity
$2,675,000.00
$2,100,000.00
Additional data obtained from an examination of the accounts in the ledger for 20Y3 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. Enter amounts that represent cash outflows as negative numbers using a minus sign.
Net loss
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.
1
Dec. 31, 20Y3
Dec. 31, 20Y2
2
Assets
3
Cash
$155,000.00
$150,000.00
4
Accounts receivable (net)
450,000.00
400,000.00
5
Inventories
770,000.00
750,000.00
6
Investments
0.00
100,000.00
7
Land
500,000.00
0.00
8
Equipment
1,400,000.00
1,200,000.00
9
Accumulated depreciation-equipment
(600,000.00)
(500,000.00)
10
Total assets
$2,675,000.00
$2,100,000.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$340,000.00
$300,000.00
13
Accrued expenses payable (operating expenses)
45,000.00
50,000.00
14
Dividends payable
30,000.00
25,000.00
15
Common stock, $4 par
700,000.00
600,000.00
16
Paid-in capital: Excess of issue price over par—common stock
200,000.00
175,000.00
17
Retained earnings
1,360,000.00
950,000.00
18
Total liabilities and stockholders’ equity
$2,675,000.00
$2,100,000.00
Score: 140/173 Livers Inc. Statement of Cash Flows For the Year Ended December 31, 20Y3 1 Cash flows from operating activities 2Net income 3 Adjustments to reconcile net income to net cash flow from operating activities: $500,000.00 Depreciation 100,000.00 5 Increase in accounts receivable (50,000.00) 6 Changes in current operating assets and liabilities: Increase in inventories Gain on sale of investments Increase in accounts payable Decrease in accrued expenses payable (20,000.00) (75,000.00) 40,000.00 (5,000.00) 10 11 Net cash flow from operating activities $490,000.00 12 13 Cash flows from investing activities: 14 Cash paid for purchase of equipment 15 Cash paid for purchase of land 16 Cash received from sale of investments 17 Net cash flow from investing activities (200,000.00) 500,000.00) 175,000.00 (525,000.00) 18 19 Cash flows from financing activities: 20 Cash received from sale of common stock 21 Cash paid for dividends 22 Net cash flow from financing activities 23 Net cash flow used for financing activities 24 Cash at the beginning of the year 25 Cash at the end of the year 125,000.00 (85,000.00) 40,000.00 $5,000.00 150,000.00 $155,000.00Explanation / Answer
Livers Inc. Statement of cash flows For the year ended December 31 2013 Particulars Amount $ Cash Flow from Operating Activities Net Income 500000 Adjustments Depreciation 100000 Gain on sale of investments -75000 Adjustment to reconcile net income to net cash flow from operating activities : Increase in Accounts Receivable -50000 Increase in inventories -20000 Increase in accounts payable 40000 Decrease in accrued expenses payable -5000 Net cash flow from operating activities 490000 Net cash flow from investing activities Cash paid for purchase of land -5,00,000 Cash paid for purchase of equipment -2,00,000 Cash received from sale of investments 1,75,000 Net cash flow used for investing activities -5,25,000 cash flow from financing activities: Cash received from sale of common stock 1,25,000 Cash paid for dividends -85,000 Net cash flow from financing activities 40,000 Change in cash 5,000 Cash at beginning of the year 1,50,000 Cash at the end of the year $1,55,000