The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20
ID: 2598869 • Letter: T
Question
The comparative balance sheet of Olson-Jones Industries Inc. for December 31, 20Y2 and 20Y1, is as follows:
1
Dec. 31, 20Y2
Dec. 31, 20Y1
2
Assets
3
Cash
$491.00
$157.00
4
Accounts receivable (net)
285.00
196.00
5
Inventories
173.00
109.00
6
Land
401.00
451.00
7
Equipment
220.00
173.00
8
Accumulated depreciation-equipment
(62.00)
(29.00)
9
Total assets
$1,508.00
$1,057.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$173.00
$157.00
12
Dividends payable
35.00
13
Common stock, $1 par
98.00
50.00
14
Paid-in capital: Excess of issue price over par—common stock
255.00
122.00
15
Retained earnings
947.00
728.00
16
Total liabilities and stockholders’ equity
$1,508.00
$1,057.00
The following additional information is taken from the records:
Labels and Amount Descriptions
Amortization of intangible assetsCash paid for dividendsCash paid for purchase of equipmentCash received from sale of common stockCash received from sale of landChange in cashDecember 31, 20Y2Decrease in accounts payableDecrease in accounts receivableDecrease in inventoriesDepreciationFor the Year Ended December 31, 20Y2Gain on sale of landIncrease in accounts payableIncrease in accounts receivableIncrease in inventoriesLoss on sale of landNet cash flow from operating activitiesNet cash flow used for operating activitiesNet cash flow from investing activitiesNet cash flow used for investing activitiesNet cash flow from financing activitiesNet cash flow used for financing activitiesNet incomeNet loss
A. 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.
Olson-Jones 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
B. Was Olson-Jones’s net cash flow from operations more or less than net income? What is the source of this difference?
Net cash flow from operations was than net income.
The source(s) of the difference are: Check all that apply.
Changes in current operating assets and liabilities
Sale of common stock
Gain on the sale of land
Dividends paid
Depreciation expense
Purchase of equipment
1
Dec. 31, 20Y2
Dec. 31, 20Y1
2
Assets
3
Cash
$491.00
$157.00
4
Accounts receivable (net)
285.00
196.00
5
Inventories
173.00
109.00
6
Land
401.00
451.00
7
Equipment
220.00
173.00
8
Accumulated depreciation-equipment
(62.00)
(29.00)
9
Total assets
$1,508.00
$1,057.00
10
Liabilities and Stockholders’ Equity
11
Accounts payable (merchandise creditors)
$173.00
$157.00
12
Dividends payable
35.00
13
Common stock, $1 par
98.00
50.00
14
Paid-in capital: Excess of issue price over par—common stock
255.00
122.00
15
Retained earnings
947.00
728.00
16
Total liabilities and stockholders’ equity
$1,508.00
$1,057.00
Explanation / Answer
a) Olson-Jones Industries Inc. Statement of Cash Flows For the year ended December 2012 Amount $ Operating Activities Net Income 321 Adjustments: Non-Cash adjustment: Depreciation (62-29) 33 Profit on sale of land (122-(451-401)) -72 Taxes paid Due to changes in Working capital Due to changes in accounts receivable (196-285) -89 Due to changes in Inventories (109-173) -64 Due to changes in accounts payable (173-157) 16 Net Cash provided (used) by operating activities 145 Investing Activities Cash used to acquire equipment (173-220) -47 Cash from sale of land 122 Net cash provided (used) by investing activities 75 Financing Activities Due to change in common stock (98+255-50-122) 181 Payment of common dividends (102-35) -67 Net cash provided (used) by investing activities) 114 Net increase/decrease in cash 334 Add: Cash balance at the begining of the year 157 Cash balance at the end of the year 491 b) The net cash flow from operating activities is different than net income due to the non-cash incomes or expenses like depreciation/Amortization, Profit/loss on sale of assets etc