The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is a
ID: 2600029 • Letter: T
Question
The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:
1
Dec. 31, 20Y2
Dec. 31, 20Y1
2
Assets
3
Cash
$917,690.00
$964,930.00
4
Accounts receivable (net)
828,620.00
762,860.00
5
Inventories
1,267,970.00
1,162,780.00
6
Prepaid expenses
29,050.00
36,010.00
7
Land
315,250.00
480,690.00
8
Buildings
1,462,990.00
901,470.00
9
Accumulated depreciation-buildings
(409,170.00)
(382,690.00)
10
Equipment
511,480.00
453,680.00
11
Accumulated depreciation-equipment
(142,100.00)
(159,400.00)
12
Total assets
$4,781,780.00
$4,220,330.00
13
Liabilities and Stockholders’ Equity
14
Accounts payable (merchandise creditors)
$923,380.00
$958,540.00
15
Bonds payable
269,000.00
0.00
16
Common stock, $25 par
323,000.00
118,000.00
17
Paid-in capital: Excess of issue price over par—common stock
771,200.00
558,000.00
18
Retained earnings
2,495,200.00
2,585,790.00
19
Total liabilities and stockholders’ equity
$4,781,780.00
$4,220,330.00
The noncurrent asset, noncurrent liability, and stockholders’ equity accounts for 20Y2 are as follows:
ACCOUNT Land
ACCOUNT Buildings
ACCOUNT Accumulated Depreciation––Buildings
ACCOUNT Equipment
ACCOUNT Accumulated Depreciation ––Equipment
ACCOUNT Bonds Payable
ACCOUNT Common Stock $25 par
ACCOUNT Paid-In Capital in Excess of Par––Common Stock
ACCOUNT Retained Earnings
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. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
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. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
Whitman Co.
Statement of Cash Flows
1
Cash flows from operating activities:
2
3
Adjustments to reconcile net loss to net cash flow from operating activities:
4
5
6
Changes in current operating assets and liabilities:
7
8
9
10
11
12
13
Cash flows from investing activities:
14
15
16
17
18
19
Cash flows from financing activities:
20
21
22
23
24
25
Cash at the beginning of the year
26
Cash at the end of the year
1
Dec. 31, 20Y2
Dec. 31, 20Y1
2
Assets
3
Cash
$917,690.00
$964,930.00
4
Accounts receivable (net)
828,620.00
762,860.00
5
Inventories
1,267,970.00
1,162,780.00
6
Prepaid expenses
29,050.00
36,010.00
7
Land
315,250.00
480,690.00
8
Buildings
1,462,990.00
901,470.00
9
Accumulated depreciation-buildings
(409,170.00)
(382,690.00)
10
Equipment
511,480.00
453,680.00
11
Accumulated depreciation-equipment
(142,100.00)
(159,400.00)
12
Total assets
$4,781,780.00
$4,220,330.00
13
Liabilities and Stockholders’ Equity
14
Accounts payable (merchandise creditors)
$923,380.00
$958,540.00
15
Bonds payable
269,000.00
0.00
16
Common stock, $25 par
323,000.00
118,000.00
17
Paid-in capital: Excess of issue price over par—common stock
771,200.00
558,000.00
18
Retained earnings
2,495,200.00
2,585,790.00
19
Total liabilities and stockholders’ equity
$4,781,780.00
$4,220,330.00
Explanation / Answer
Whitman Company
Statement of Cash Flows
For the year ended December 31, 20Y2
$ $ Cash Flows from Operating Activities Net Loss (58,980) Adjustments to reconcile net loss to net cash flows from operations Depreciation Expense 55,450 Loss on sale of land 12,040 Increase in accounts receivable (65,760) Increase in inventory (105,190) Decrease in prepaid expenses 6,960 Decrease in accounts payable (35,160) (131,660) Net cash used in operating activities (190,640) Cash Flows from Investing Activities Cash received from land sold 153,400 Cash paid for acquisition of building (561,520) Cash paid for purchase of equipment (104,070) Net cash used in Investing Activities (512,190) Cash Flows from Financing Activities Cash received from issuance of common stock 418,200 Cash received from issuance of bonds payable 269,000 Cash paid for dividends (31,610) Net cash flows from Financing Activities 655,590 Change in Cash (47,240) Beginning cash balance 964,930 Ending cash balance 917,690