Part 3: Free Response (35 points total). Partial credit given. andy Corporation\
ID: 2589917 • Letter: P
Question
Part 3: Free Response (35 points total). Partial credit given. andy Corporation's balance sheet and income statement appear Comparative Balance Sheet Ending Beginning Balance Balance Assets Cash and cash equivalents.. Accounts receivable Inventory... Property, plant and equipment Less accumulated depreciation. Total assets. $ 31 61 59 684 349 $486 $ 29 73 61 550 319 $394 Liabilities and Stockholders' Equity Accounts payable Accrued liabilities Income taxes payable . Bonds payable. .. Common stock Retained earnings Total liabilities and stockholders' equity. $ 53 20 52 203 61 97 $ 54 21 48 190 60 21 S486 S394 Income Statement $807 492 ....315 Sales Cost of goods sold.. Gross margin Selling and administrative expense.. 182 Net operating income....133 Gain on sale of equipment. Income before taxes. Income taxes. Net income 149 45 S104 The company sold equipment for S18 that was originally purchased for $14 and tha umulated depreciation of $12. It paid a cash dividend of $28 during the year and not retire any bonds payable or repurchase any of its own common stock.Explanation / Answer
Statement of cash flow :
Cash flow from operating activity Net income 104 Adjustment to convert net income to cash basis Depreciation 42 Gain on sale of equipment (16) Decrease account receivable 12 Decrease inventory 2 Decrease account payable (1) Decrease accured liabilities (1) Increase income tax payable 4 Net cash flow from operating activities 146 Cash flow from investing activities Sale of equipment 18 Purchase of equipment (148) Net cash flow from investing activities (130) Cash flow from financing activity Issue bonds payable 13 Issue common stock 1 Dividend paid (28) Net cash flow from financing activity (14) Net increase (decrease) in cash and cash equivalents 2 Beginning cash and cash equivalents 29 Ending cash and cash equivalents 31