The comparative balance sheet of Del Ray Enterprises Inc. at December 31, 2016 a
ID: 2572720 • Letter: T
Question
The comparative balance sheet of Del Ray Enterprises Inc. at December 31, 2016 and 2015, is as follows
Additional data obtained from the income statement and from an examination of the accounts in the ledger for 2016 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. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section and enter in the order listed on the Instructions page.
A. Net income, $343,310 B. Depreciation reported on the income statement, $83,570 C. Equipment was purchased at a cost of $163,630 and fully depreciated equipment costing $45,700 was discarded, with no salvage realized. D. 10,000 shares of common stock were issued at $19 for cash. E. The mortgage note payable was not due until 2018 but the terms permitted earlier payment without penalty. F. Cash dividends declared and paid, $154,190 L, ZUIO Assets Cash 4Accounts receivable (net) 5Merchandise inventory 6 Prepaid expenses 7 Equipment 8Accumulated depreciation-equipment 9 Total assets 590.00 $180,310.00 242,510.00 298,480.00 9,770.00 536,710.00 (170,680.00) (132,810.00) 1,189,200.00 $1,134,970.00 223,920.00 322,020.00 12,710.00 654,640.00 Liabilities and Stockholders' Equity 10 11 Accounts payable (merchandise creditors) 12 Mortgage note payable 13 Common stock, $10 par 14 Paid-in capital: Excess of issue price over par-common stock 15 Retained earnings 249,470.00 $238,540.00 335,820.00 23,000.00 310,000.00 227610.00 0.00 73,000.00 450,000.00 416,730.00Explanation / Answer
Del Rey Enterprises Inc. Cash Flow Statement For the Year End on 31st Dec 2016 Cash Flow from Operating Activities Net Income 343,310 Adjustments : Depreciation 83,570 Decrease in Accounts receivables 18,590 Increase in Merchandise Inventory (23,540) Increase in Prepaid Expenses (2,940) Increase in Accounts Payable 10,930 86,610 Cash generated from operations 429,920 Cash Flow from Investing Activities Purchase of Equipment (163,630) Net Cash used in Investing Activites (163,630) Cash Flow from Financing Activites Dividend paid (154,190) Decrease in Mortgage Note payable (335,820) Proceeds from Issue of Common Stock 190,000 Net Cash used in Financing Activites (300,010) Net decrease Cash and Cash Equivalents (33,720) Cash At the Beginning of the Year 180,310 Cash At the end of the Year 146,590