The comparative balance sheet of Pelican Joe Industries Inc. for December 31, 20
ID: 2592285 • Letter: T
Question
The comparative balance sheet of Pelican Joe Industries Inc. for December 31, 2016 and 2015, is as follows:
Question not attempted.
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$488.00
$163.00
4
Accounts receivable (net)
283.00
203.00
5
Inventories
171.00
110.00
6
Land
396.00
455.00
7
Equipment
225.00
171.00
8
Accumulated depreciation-equipment
(56.00)
(26.00)
9
Total assets
$1,507.00
$1,076.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$173.00
$164.00
12
Dividends payable
26.00
13
Common stock, $10 par
98.00
47.00
14
Paid-in capital: Excess of issue price over par—common stock
254.00
122.00
15
Retained earnings
956.00
743.00
16
Total liabilities and stockholders’ equity
$1,507.00
$1,076.00
The following additional information is taken from the records:
A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities
The section of the statement of cash flows that reports the cash transactions affecting the determination of net income.
. 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.
Question not attempted.
Pelican Joe Industries Inc.
Statement of Cash Flows
1
Cash flows from operating activities:
2
3
Adjustments to reconcile net income to net cash flow from operating activities:
4
5
6
Changes in current operating assets and liabilities:
7
8
9
10
11
Cash flows from investing activities:
12
13
14
15
Cash flows from financing activities:
16
17
18
19
20
Cash at the beginning of the year
21
Cash at the end of the year
Solution
Pelican Joe Industries Inc.
Statement of Cash Flows
1
Cash flows from operating activities:
2
3
Adjustments to reconcile net income to net cash flow from operating activities:
4
5
6
Changes in current operating assets and liabilities:
7
8
9
10
11
Cash flows from investing activities:
12
13
14
15
Cash flows from financing activities:
16
17
18
19
20
Cash at the beginning of the year
21
Cash at the end of the year
Net cash flow from operations was selector 1
less
more
than net income.
Points:
The source(s) of the difference are: Check all that apply.
Sale of common stock
Gain on the sale of land
Purchase of equipment
Dividends paid
Depreciation expense
Changes in current operating assets and liabilities
1
Dec. 31, 2016
Dec. 31, 2015
2
Assets
3
Cash
$488.00
$163.00
4
Accounts receivable (net)
283.00
203.00
5
Inventories
171.00
110.00
6
Land
396.00
455.00
7
Equipment
225.00
171.00
8
Accumulated depreciation-equipment
(56.00)
(26.00)
9
Total assets
$1,507.00
$1,076.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$173.00
$164.00
12
Dividends payable
26.00
13
Common stock, $10 par
98.00
47.00
14
Paid-in capital: Excess of issue price over par—common stock
254.00
122.00
15
Retained earnings
956.00
743.00
16
Total liabilities and stockholders’ equity
$1,507.00
$1,076.00
Explanation / Answer
Pelican Joe Industries Inc.
Statement of Cash Flows
1
Cash flows from operating activities:
2
OPERATING INCOME
313
3
Adjustments to reconcile net income to net cash flow from operating activities:
4
ADD DEPRECIATION
30
5
LESS PROFIT ON SALE OF LAND
63
-33
6
Changes in current operating assets and liabilities:
7
INVENTORY
-61
8
ACC REC
-80
9
ACC PAY
+9
10
DIV PAY
+26
-106
11
Cash flows from investing activities:
12
PURCHASE OF EQUIP
-54
13
SALE PROCEEDS OF LAND
+122
+68
14
15
Cash flows from financing activities:
16
ISSUE OF COMMON STOCK
+51
17
EXCESS OVER PAR
+132
18
DIVIDENDS PAID
-100
83
19
325
20
Cash at the beginning of the year
163
21
Cash at the end of the year
488
Pelican Joe Industries Inc.
Statement of Cash Flows