The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y
ID: 2571854 • 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:
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, 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
Score: 123/153 Yellow Dog Enterprises Inc Statement of Cash Flows For the Year Ended December 31, 20Y8 1Cash flows from operating activities: 2 Net income 3 Adjustments to reconcile net income to net cash flow from operating activities: $190,000.00 Depreciation 115,000.00 5Changes in current operating assets and liabilities: Decreas Increase in inventory Increase in accounts payable Increase in prepaid expenses 25,000.00 (110,000.00) (50,000.00) 10,000.00 e in accounts receivable 10 Net cash flow from operating activities 225,000.00 12 Cash flows from investing activities: 13Cash paid for purchase of equipment 14 Net cash flow used for investing activities $(395,000.00) (395,000.00) 15 16 Cash flows from financing activities: 7 Cash received from sale of common stock 18 Cash paid to retire mortgage note payable 19 Cash paid for dividends 20 Net cash flow used for financing activities 21 Cash paid for equipment 22 Cash at the beginning of the year 23 Cash at the end of the year $600,000.00 (400,000.00) 50,000.00) 150,000.00 $(20,000.00) 100,000.00 $80,000.00Explanation / Answer
Cash Flow statement is as prepared below:
Yellow Dog enterprises Inc. Statement of Cash Flow-Indirect Method For the Year Ended December 31, 20Y8 Cash Flow from Operating activities: Net Income 190,000 Adjustments to convert Net Income to net cash flow from operating activities: Depreciation 115,000 Changes in current operating assets and liabilities: Decrease in account receivable 25,000 Increase in Inventory -110,000 Increase in accounts payable 10,000 Increase in prepaid expenses -5,000 Net cash flow from operating activities 225,000 Cash Flow from Investing activities: Cash paid for equipment -395,000 Net cash flow used for investing activities -395,000 Cash Flow from financing activities: Cash received from sale of common stock 600,000 Cash paid to retire mortgage note payable -400,000 Cash paid for dividends -50,000 Net Cash flow from financing activities 150,000 Change in cash -20,000 Cash at the beginning of the year 100,000 Cash at the end of the year 80,000