Problem 12-7A (Part Level Submission) Presented below are the financial statemen

Question

Problem 12-7A (Part Level Submission) Presented below are the financial statements of Splish Brothers Company. Splish Brothers Company Comparative Balance Sheets December 31 2017 2016 Assets Cash Accounts receivable Inventory Property, plant, and equipment Accumulated depreciation Total $ 75,950 43,400 60,760 130,200 (69,440 ) $ 43,400 30,380 43,400 169,260 (52,080) $240,870 $234,360 Liabilities and Stockholders' Equity Accounts payable Income taxes payable Bonds payable Common stock Retained earning:s Total $41,230 15,190 36,890 39,060 108,500 $240,870 $32,550 17,360 71,610 30,380 82,460 $234,360

Explanation / Answer

Notes:

1. Income tax paid = $17360 + $17360 - $15190 = $19530

2. Bonds redeemed = $71610 - $36890 = $34720

3. Common stock issued = $39060 - $30380 = $8680

Amount ($) Amount ($) Cash flow from Operating Activities: Net Income           69,440 Less: Income tax paid         -19,530 Adjustments to reconcile net income: Add: Depreciation           37,975         : Income tax expense           17,360 Adjustments for changes in working capital: Add: Increase in accounts payable             8,680 Less: Increase in accounts receivable         -13,020          : Increase in inventory         -17,360 Cash flow from Operating Activities           83,545 Cash flow from Investing Activities Sale of equipment           18,445 Cash flow from Investing Activities           18,445 Cash flow from Financing Activities Dividends paid -43400 Bonds redeemed -34720 Common stock issued 8680 Cash flow used in Financing Activities         -69,440 Net Increase in Cash           32,550 Beginning cash balance           43,400 Ending cash balance           75,950

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