ch. 12 q 8. please answer correctly.
Statement of Cash Flows (Direct Method) The Geary Company's income statement and comparative balance sheets as of December 31 of 2019 and 2018 follow. GEARY COMPANY Income Statement For the Year Ended December 31, 2019 Service Fees Earned $320,000 Dividend and Interest Income 16,000 $336,000 Wages and Other Operating Expenses $288,000 Depreciation Expense 55,000 Franchise Amortization Expense 10,000 Loss on Sale of Equipment 7,000 Gain on Sale of Investments (17,000) 343,000 Net Loss $17.000) GEARY COMPANY Balance Sheets Dec. 31, 2019 Dec. 31, 2018 Assets Cash $21,000 $33,000 Accounts Receivable 14,000 18,000 Interest Receivable 4,000 Prepaid Expenses 16,000 10,000 Long-term Investments --Available for Sale 70,000 Fair Value Adjustment to Investments 10,000 Plant Assets 656,000 655,000 Accumulated Depreciation (237,000) (185,000) Franchise 91,000 29,000 Total Assets 5561,000 $644,000 Liabilities and Stockholders' Equity Accrued Liabilities $12,000 $14,000 Notes Payable 26,000 Common Stock (510 par value) 535,000 535,000 Retained Earnings 34,000 59,000 Balance Sheets Dec 31, 2019 Dec 31, 2014 Assets Cash 21000 533,000 Accounts Rece 14.000 TO interest Receivable 4000 Prepaid Expenses 16.000 10,000 Long term investment for Sale os Fair Valent to investments 10.000 Pant Assets 56.000 5.000 Accumulated Depreca 227,000 185.000 Franchise 91.000 20.000 Tutal Assets 1000 1644000 Liabilities and Stockholders' quity Accrued Liabilities $12,000 314.000 Notes Payable 20000 Common Stock 510 par vam 595.000 39.000 Retained ning 34000 50.000 Uued Gain on vestments 10.000 Treasury Stock (20,000 Total Liabiles and Stockholders Equity 5561.000 During the year, the following transactions occurred 1. Sold equipment for $9.000 cash that originally cost $19,000 and had $3.000 accumulated depreciation 2. Sold long-term investments that had cost $70,000 for $87,000 cash. Unrealized gains totaling $10,000 related to these investments had been recorded in earlier years. At year end the for value adjustment and unrealized gain account balances were eliminated 3. Paid cash to extend the company's exclusive franchise for another three years 4. Paid off a note payable at the bank on January 1. 5. Declared and paid an $18,000 dividend, 6. Purchased treasury stock for cash. 7. Purchased land valued at $20,000 Required a. Compute the change in cash that occurred during 2019, Required Compute the change in cash that occurred during 2019, b. Prepare a statement of cash flows using the direct method. Use one cash outflow for cash paid for wages and other operating expenses. Accounts payable relates to inventory purchases only a. Change in Cash during 2019 $ 12,000 Decrease ty 20.000) 0.0001 48.000 b. Use a negative sign with cash outflow answers GUARY COMPANY Statement of Cash Flow For Year Ended December 31, 2019 Cash Flow from Operating Activities Cash Received from Custown 324,000 Cash Receved as Didends and interest 20.000 Ca Paid for Wages and Other Operating Expenses Cash Provided by Operating Activities Cash Flow from investing Activities Sale of Buiment 9.000 Purchase of Land (20.000 Sale of investments 87.000 Extension of Franchise 172.0001 Cash Provided by Investing Activities Cash flow from Financing Activities Payment of Notes Payable 126.000) Payment of Dividends (1.000) Purchase of Treasury Stock (20.000) Cash Used by Financing Activities Net Change in Cash Cash at Beginning of Year Cash at End of Year 4,000 164.000 112.000 33.000 21.000 5 Check
