The comparative balance sheet of Canace Products Inc. for December 31, 20Y6 and
ID: 2599460 • 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.
Score: 67/131
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
STATEMENT OF CASH FLOW Amount in $ Amount in $ Net income $ 2,14,200 Cash flows from operating activities Adjustments for: Depreciation of the year $ 44,070 Loss on Sale of investments $ 65,430 Loss on sale of Equipment $ 1,09,500 Effects/ changes in Assets & Liabilities (Increase) / Decrease in Account receivables $ -19,770 Inventory Decrease / (Increase) $ -26,820 Dividend Payable $ 1,620 Accounts payable Increase / ( Decrese) $ 24,610 Accrued Expenses Payable $ -7,030 $ -27,390 Net cash from operating activities $ 2,96,310 Cash flows from investing activities Purchase of Land $ -5,20,090 Purchase of Equipment $ -1,99,220 Sale of Investment $ 1,75,190 Net cash used in investing activities $ -5,44,120 Cash flows from Financing activities Issue of Common Stock $ 2,40,000 Dividend Paid $ -28,580 Net cash used in financing activities $ 2,11,420 Net increase in cash and cash equivalents $ -36,390 Add :Cash and cash equivalents at beginning of period $ 6,79,710 Cash and cash equivalents at end of period $ 6,43,320 Working Notes: 1) Opening Retained Earning = $ 18,81,370 Add: Net Income $ 2,14,200 Less: Closing Retaiend Earning $ 20,66,990 Dividend Paid for the year $ 28,580