Question
11. Financial statements for Sunland Company are given below: Sunland Company Balance Sheet January 1, 2021 Assets Equities Cash $ 957000 Accounts payable $ 460000
11. Financial statements for Sunland Company are given below:
Sunland Company | ||||||
Balance Sheet | ||||||
January 1, 2021 | ||||||
Assets | Equities | |||||
Cash | $ 957000 | Accounts payable | $ 460000 | |||
Accounts receivable | 863000 | |||||
Buildings and equipment | 3660000 | |||||
Accumulated depreciation buildings and equipment | (1180000 | ) | Common stock | 2760000 | ||
Patents | 434000 | Retained earnings | 1514000 | |||
$4734000 | $4734000 |
Sunland Company | |||||||
Statement of Cash Flows | |||||||
For the Year Ended December 31, 2021 | |||||||
Increase (Decrease) in Cash | |||||||
. | |||||||
Cash flows from operating activities | |||||||
Net income | $1280000 | ||||||
Adjustments to reconcile net income to net cash provided by operating activities: | |||||||
Increase in accounts receivable | $(380000 | ) | |||||
Increase in accounts payable | 194000 | ||||||
Depreciationbuildings and equipment | 357000 | ||||||
Gain on sale of equipment | (148000 | ) | |||||
Amortization of patents | 51000 | 74000 | |||||
Net cash provided by operating activities | 1354000 | ||||||
. | |||||||
Cash flows from investing activities | |||||||
Sale of equipment | 290000 | ||||||
Purchase of land | (594000 | ) | |||||
Purchase of buildings and equipment | (1149000 | ) | |||||
Net cash used by investing activities | (1453000) | ||||||
. | |||||||
Cash flows from financing activities | |||||||
Payment of cash dividend | (361000 | ) | |||||
Sale of common stock | 961000 | ||||||
Net cash provided by financing activities | 600000 | ||||||
Net increase in cash | 501000 | ||||||
Cash, January 1, 2021 | 957000 | ||||||
Cash, December 31, 2021 | $1458000 |
Total assets on the balance sheet at December 31, 2021 are $6653000. Accumulated depreciation on the equipment sold was $334000. When the equipment was sold, the Buildings and Equipment account received a credit of
| a. $618000. |
| b. $334000. |
| c. $476000. |
| d. $290000. |
12. Crane Company reported net income of $59000 for the year ended December 31, 2021 Included in net income were depreciation expense of $8000 and a gain on sale of equipment of $1600. Each of the following accounts increased during 2021:
Accounts receivable | $2100 |
Inventory | $4700 |
Prepaid rent | $6500 |
Available-for-sale securities | $1600 |
Accounts payable | $4700 |
What is the amount of cash provided by operating activities for Crane Company for the year ended December 31, 2021?
| a. $56800 |
| b. $55200 |
| c. $58400 |
| d. $47800 |
13. Sheridan Company has recently decided to go public and has hired you as an independent CPA. One statement that the enterprise is anxious to have prepared is a statement of cash flows. Financial statements of Sheridan Company for 2022 and 2021 are provided below.
BALANCE SHEETS | |||||||||||
12/31/22 | 12/31/21 | ||||||||||
Cash | $407000 | $ 193000 | |||||||||
Accounts receivable | 362000 | 214000 | |||||||||
Inventory | 382000 | 482000 | |||||||||
Property, plant and equipment | $609000 | $960000 | |||||||||
Less accumulated depreciation | (321000 | ) | 288000 | (306000 | ) | 654000 | |||||
$1439000 | $1543000 | ||||||||||
. | |||||||||||
Accounts payable | $ 176000 | $ 97000 | |||||||||
Income taxes payable | 351000 | 394000 | |||||||||
Bonds payable | 359000 | 602000 | |||||||||
Common stock | 217000 | 215000 | |||||||||
Retained earnings | 336000 | 235000 | |||||||||
$1439000 | $1543000 |
INCOME STATEMENT For the Year Ended December 31, 2022 | |||||||||
Sales revenue | $8410000 | ||||||||
Cost of sales | 7153000 | ||||||||
Gross profit | 1257000 | ||||||||
Selling expenses | $599000 | ||||||||
Administrative expenses | 194000 | 793000 | |||||||
Income from operations | 464000 | ||||||||
Interest expense | 72000 | ||||||||
Income before taxes | 392000 | ||||||||
Income taxes | 98000 | ||||||||
Net income | $ 294000 |
The following additional data were provided:
1. | Dividends for the year 2022 were $193000. | |
2. | During the year, equipment was sold for $240000. This equipment cost $350000 originally and had a book value of $288000 at the time of sale. The loss on sale was incorrectly charged to cost of sales. | |
3. | All depreciation expense is in the selling expense category. |
The net cash provided by operating activities is
| a. $294000. |
| b. $246000. |
| c. $407000. |
| d. $203000. |
14. The balance in retained earnings at December 31, 2020 was $1433000 and at December 31, 2021 was $1162000. Net income for 2021 was $1063000. A stock dividend was declared and distributed which increased common stock $504000 and paid-in capital $185000. A cash dividend was declared and paid. The amount of the cash dividend was
| a. $645000. |
| b. $511000. |
| c. $830000. |
| d. $1334000. |
15. Coronado Industries provided the following information on selected transactions during 2021:
Dividends paid to preferred stockholders | $ 505000 | ||
Loans made to affiliated corporations | 1440000 | ||
Proceeds from issuing bonds | 1580000 | ||
Proceeds from issuing preferred stock | 2060000 | ||
Proceeds from sale of equipment | 790000 | ||
Purchases of inventories | 2430000 | ||
Purchase of land by issuing bonds | 608000 | ||
Purchases of treasury stock | 1250000 |
The net cash provided (used) by investing activities during 2021 is
| a. $(1250000). |
| b. $182000. |
| c. $790000. |
| d. $(650000). |
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