The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and
ID: 2598874 • Letter: T
Question
The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and 20Y5, is as follows:
1
Dec. 31, 20Y6
Dec. 31, 20Y5
2
Assets
3
Cash
$643,320.00
$679,710.00
4
Accounts receivable (net)
567,060.00
547,290.00
5
Inventories
1,010,150.00
983,330.00
6
Investments
0.00
240,620.00
7
Land
520,090.00
0.00
8
Equipment
879,420.00
680,200.00
9
Accumulated depreciation
(244,310.00)
(200,240.00)
10
Total assets
$3,375,730.00
$2,930,910.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$772,600.00
$747,990.00
13
Accrued expenses payable (operating expenses)
63,150.00
70,180.00
14
Dividends payable
8,990.00
7,370.00
15
Common stock, $2 par
56,000.00
32,000.00
16
Paid-in capital: Excess of issue price over par—common stock
408,000.00
192,000.00
17
Retained earnings
2,066,990.00
1,881,370.00
18
Total liabilities and stockholders’ equity
$3,375,730.00
$2,930,910.00
The income statement for the year ended December 31, 20Y6, is as follows:
1
Sales
$5,978,640.00
2
Cost of goods sold
2,452,460.00
3
Gross profit
$3,526,180.00
4
Operating expenses:
5
Depreciation expense
$44,070.00
6
Other operating expenses
3,099,060.00
7
Total operating expenses
3,143,130.00
8
Operating income
$383,050.00
9
Other expense:
10
Loss on sale of investments
(65,430.00)
11
Income before income tax
$317,620.00
12
Income tax expense
103,420.00
13
Net income
$214,200.00
Additional data obtained from an examination of the accounts in the ledger for 20Y6 are as follows:
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.
Canace Products Inc.
Statement of Cash Flows
1
Cash flows from operating activities:
2
3
4
5
6
7
8
Cash flows from investing activities:
9
10
11
12
13
14
Cash flows from financing activities:
15
16
17
18
19
Cash at the beginning of the year
20
Cash at the end of the year
1
Dec. 31, 20Y6
Dec. 31, 20Y5
2
Assets
3
Cash
$643,320.00
$679,710.00
4
Accounts receivable (net)
567,060.00
547,290.00
5
Inventories
1,010,150.00
983,330.00
6
Investments
0.00
240,620.00
7
Land
520,090.00
0.00
8
Equipment
879,420.00
680,200.00
9
Accumulated depreciation
(244,310.00)
(200,240.00)
10
Total assets
$3,375,730.00
$2,930,910.00
11
Liabilities and Stockholders’ Equity
12
Accounts payable (merchandise creditors)
$772,600.00
$747,990.00
13
Accrued expenses payable (operating expenses)
63,150.00
70,180.00
14
Dividends payable
8,990.00
7,370.00
15
Common stock, $2 par
56,000.00
32,000.00
16
Paid-in capital: Excess of issue price over par—common stock
408,000.00
192,000.00
17
Retained earnings
2,066,990.00
1,881,370.00
18
Total liabilities and stockholders’ equity
$3,375,730.00
$2,930,910.00
Explanation / Answer
Canace Products Inc. Statement of Cash Flows For the year ended December 2016 Amount $ Operating Activities Net Income 2,14,200 Adjustments: Non-Cash adjustment: Depreciation (244310-200240) 44,070 Loss on sale of investment 65,430 Taxes paid Due to changes in Working capital Due to changes in accounts receivable (547290-567060) -19,770 Due to changes in Inventories (983330-1010150) -26,820 Due to changes in accounts payable (772600-747990) 24,610 Due to changes in accruals (63150-70180) -7,030 Net Cash provided (used) by operating activities 2,94,690 Investing Activities Cash used to acquire equipment (680200-879420) -1,99,220 Cash from sale of investment 1,75,190 Cash used to purchase of land -5,20,090 Net cash provided (used) by investing activities -5,44,120 Financing Activities Due to change in common stock (56000+408000-32000-192000) 2,40,000 Payment of common dividends (1881370+214200-2066990+7370-8990) -26,960 Net cash provided (used) by investing activities) 2,13,040 Net increase/decrease in cash -36,390 Add: Cash balance at the begining of the year 6,79,710 Cash balance at the end of the year 6,43,320