Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

C30 4 A B X fc C D E ABC Company Comparative Balance Sheets As of 12/31/16 and 12/31/17 F G H 8 Cash 9

image text in transcribedimage text in transcribed

C30 4 A B X fc C D E ABC Company Comparative Balance Sheets As of 12/31/16 and 12/31/17 F G H 8 Cash 9 AR 10 Allow. Doubtful Acct 11 Inventory 12 PP&E 13 Acc. Deprec. 12/31/17 41,800 110,000 (2,750) 150,000 450,000 (65,000) 684,050 12/31/16 30,000 89,000 (2.225) 135.000 300,000 (75,000) 476,775 AP TP Dividend payable NP 12/31/17 - 12/31/16 41,000 50,000 6,900 3,000 8,000 350,000 220.000 281,000 150,000 100.000 95,775 684.050 476,775 Notes: You may find it helpful to add additional t-accounts. Constructing statement of cash flows is like putting a puzzle together. You start with the information given and work toward solving the unknowns. The t-account is another way of stating an algebraic equation. At- account is the beginning balance + additions - subtractions = the ending balance. If you know three of those, you can solve for the fourth. C/S RE Accumulated Depreciation 650,000 425,000 225,000 ABC Company Income Statement For Year Ending 12/31/17 20 Revenue 21 Cost of goods sold 22 Gross profit 23 Gain (loss) on sale of equipment 24 Depreciation expense 25 S&A expense 26 Interest expense 27 Taxable income 28 Tax expense 29 Net income (22,500) (80,000) (35,000) 30 31 1. ABC borrowed $150,000 on 1/1/17 to help pay for a new machine that cost $250,000. 32 33 2. ABC sold one old machine for $57,500. 35 3. ABC paid the dividend declared on 12/31/16. 37 4. ABC paid a $10,000 dividend that was declared on 6/30/17. 38 39 5. ABC declared a second $15,000 dividend on 12/31/17. 40 41 6. Tax rate is 35%. 42 43 Required: Prepare the 2017 statement of cash flows in good form. Use the indirect method. 45 46 information statement of cash flows E F G H I J C D ABC Company Statement of Cash Flows For Year Ending 12/31/17 5 Cash flow from operating activities Net income Net cash provided by operating activities 17 Cash flow from investing activities 18 19 Net cash used by investing activities 22 Cash flow from financing activities 26 Net cash used by investing activities 28 Net change in cash 29 Cash balance (1/1/2017) 30 Cash balance (12/31/2017) 30,000 41,800 $ C30 4 A B X fc C D E ABC Company Comparative Balance Sheets As of 12/31/16 and 12/31/17 F G H 8 Cash 9 AR 10 Allow. Doubtful Acct 11 Inventory 12 PP&E 13 Acc. Deprec. 12/31/17 41,800 110,000 (2,750) 150,000 450,000 (65,000) 684,050 12/31/16 30,000 89,000 (2.225) 135.000 300,000 (75,000) 476,775 AP TP Dividend payable NP 12/31/17 - 12/31/16 41,000 50,000 6,900 3,000 8,000 350,000 220.000 281,000 150,000 100.000 95,775 684.050 476,775 Notes: You may find it helpful to add additional t-accounts. Constructing statement of cash flows is like putting a puzzle together. You start with the information given and work toward solving the unknowns. The t-account is another way of stating an algebraic equation. At- account is the beginning balance + additions - subtractions = the ending balance. If you know three of those, you can solve for the fourth. C/S RE Accumulated Depreciation 650,000 425,000 225,000 ABC Company Income Statement For Year Ending 12/31/17 20 Revenue 21 Cost of goods sold 22 Gross profit 23 Gain (loss) on sale of equipment 24 Depreciation expense 25 S&A expense 26 Interest expense 27 Taxable income 28 Tax expense 29 Net income (22,500) (80,000) (35,000) 30 31 1. ABC borrowed $150,000 on 1/1/17 to help pay for a new machine that cost $250,000. 32 33 2. ABC sold one old machine for $57,500. 35 3. ABC paid the dividend declared on 12/31/16. 37 4. ABC paid a $10,000 dividend that was declared on 6/30/17. 38 39 5. ABC declared a second $15,000 dividend on 12/31/17. 40 41 6. Tax rate is 35%. 42 43 Required: Prepare the 2017 statement of cash flows in good form. Use the indirect method. 45 46 information statement of cash flows E F G H I J C D ABC Company Statement of Cash Flows For Year Ending 12/31/17 5 Cash flow from operating activities Net income Net cash provided by operating activities 17 Cash flow from investing activities 18 19 Net cash used by investing activities 22 Cash flow from financing activities 26 Net cash used by investing activities 28 Net change in cash 29 Cash balance (1/1/2017) 30 Cash balance (12/31/2017) 30,000 41,800 $

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

The Impact Of Auditor Rotation On Audit Quality A Field Study From Egypt

Authors: Diana Mohamed

1st Edition

3848425378, 978-3848425372

More Books

Students also viewed these Accounting questions