Problem 1: Wild Willy\'s Nautical Adventures comparative balance sheets at Decem
ID: 2588374 • Letter: P
Question
Problem 1: Wild Willy's Nautical Adventures comparative balance sheets at December 31, 2017 and 2016 are presented below 2016 Chane $14,000 28,000 (4,000) Cash Accounts Receivable Inventory Prepaid Expenses Land Dock and Buildings Accumulated Depr- Dock/Build Equipment Accumulated Depr- Equip Total Assets 85,000 80,000 26,000 55,000 18,000 144,000 15,000 25,000 8,000 (34,000) 110,000 300,000 (93,000) (80,000) 210,000 (13,000) 54,000 264,000 (63.000 50000) (13.000) 5723.000 $695.000 Liabilities and Equity (25,000) Accounts Payable Notes Payable Bonds Payable Common Stock Retained Earnings 10,000 35,000 300,000 120,000 193,000 190,000 350,000 70,000 (S0,000) 50,000 Total Liabilities and Equity S723.000 $695,000 28.000 Additional Information: 1. Bonds were converted at face value by issuing 50,000 shares of $1 par value common stock 2. Operating Expenses include depreciation expense of $48,000. 3. Net Income for 2017 was $15,000. 4. Equipment was purchased for $38,000 cash and a note payable. In addition, equipment costing $34,000 with a book value of $12,000 was sold for $9,000 cash. 5. Cash dividends of $12,000 were declared and paid. 6. Land was sold for cash at a $5,000 loss structions: repare a statement of cash flows for the year ended December 31, 2017, using the indirect method.Explanation / Answer
Statement of Cash Flow Particulars Amount Total Amount Income 15,000.00 Loss on sale of land 5,000.00 Loss on sale of equipment 3,000.00 Depreciation - Building and equipment 48,000.00 Increase in AR (15,000.00) Increase in inventory (25,000.00) Increase in prepaid expenses (8,000.00) Decrease in AP (25,000.00) Cash flow from operating activities (2,000.00) Cash flow from Investing activities Sale of Land 29,000.00 Purchase of PPE (38,000.00) Sale of Equipment 9,000.00 Cash flow from Investing activities - Cash flow from Financing activities Issue of Stock Redemption of bonds Dividends Paid (12,000.00) Cash flow from Financing activities (12,000.00) Opening cash and cash equivalents 28,000.00 Closing cash and cash equivalents 14,000.00