Problem 12-9A Condensed financial data of Waterway Industries follow. Waterway I
ID: 2605828 • Letter: P
Question
Problem 12-9A
Condensed financial data of Waterway Industries follow.
Waterway Industries
Comparative Balance Sheets
December 31
Assets
2017
2016
$ 114,736
$ 68,728
124,676
53,960
159,750
146,047
40,328
36,920
195,960
154,780
404,700
344,350
(71,000
)
(73,840
)
$969,150
$730,945
Liabilities and Stockholders’ Equity
$ 144,840
$ 95,566
23,430
29,820
156,200
207,320
312,400
248,500
332,280
149,739
$969,150
$730,945
Waterway Industries
Income Statement Data
For the Year Ended December 31, 2017
$551,613
$192,353
17,622
66,030
38,738
6,717
10,650
332,110
$ 219,503
Additional information:
Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)
Adjustments to reconcile net income to
Waterway Industries
Comparative Balance Sheets
December 31
Assets
2017
2016
Cash$ 114,736
$ 68,728
Accounts receivable124,676
53,960
Inventory159,750
146,047
Prepaid expenses40,328
36,920
Long-term investments195,960
154,780
Plant assets404,700
344,350
Accumulated depreciation(71,000
)
(73,840
)
Total$969,150
$730,945
Liabilities and Stockholders’ Equity
Accounts payable$ 144,840
$ 95,566
Accrued expenses payable23,430
29,820
Bonds payable156,200
207,320
Common stock312,400
248,500
Retained earnings332,280
149,739
Total$969,150
$730,945
Explanation / Answer
Waterway Industries Statement of Cash Flows For the year ended Amount Cash flows from operating activities Net Income $219,503 Adjust to reconcile net income to net cash provided Depreciation expenses $66,030 Loss on disposal of plant assets $10,650 Increase in Accounts receivable -$70,716 Increase in Inventory -$13,703 Increase in Prepaid expenses -$3,408 Increase in Accounts Payable $49,274 Decrease in accrued expenses payable -$6,390 Net cash used by operating activities $251,240 Cash flows from investing activities Cash payment for acquisition of plant assets -$142,000 Sale of Plant Assets $2,130 Cash payment for acquisition of Long-term investment -$41,180 Net cash used by investing activities -$181,050 Cash flows from financing activities Issuance of Common Stock $63,900 Bond Payable matured -$51,120 Payment of Dividends -$36,962 Net cash provided by financing activities -$24,182 Net decrease in cash $46,008 Cash at Beginning of Period $68,728 Cash at End of Period $114,736