Chs 13 & 16 Review Assessment[MPS] Calculator Mastery Problem: Statement of Cash Flows N1 Championship Boxing, Inc. Statement of Cash Flows Balance Sheet Championship Boxing, Inc. Championship Boxing, Inc. is a small manufacturer of cardboard boxes of all sizes. You have reported for your first day of work, and the company is in an uproar. Yearly financial statements are being prepared, but a computer malfunction of the company's new BOX-9000 computer has inadvertently erased parts of the company's balance sheet, along with almost all related data except the company's statement of cash flows. The IT department is working to retrieve earlier backups, but estimates that the reconstruction of the data will take about 24 hours. Unfortunately, financial statements are to be presented at a stockholders' meeting in one hour. The company uses the indirect method to prepare its statement of cash flows (rather than the direct method), so your new supervisor believes the missing data for the balance sheet can be prepared using the statement of cash flows. You are assigned this task, since you were top student in your business school class. Meanwhile, the supervisor will go to the stockholders' meeting and give some introductory remarks. In addition to the statement of cash flows, the following data survived the computer mishap: A. The investments were sold for $280,000 cash. B. Equipment was acquired for $152,000 cash. C. Land was acquired for $326,000 cash. D. There were no disposals of equipment during the year. E. 12,500 shares of common stock were sold for cash during the year. F. There was a $96,000 debit to Retained Earnings for cash dividends declared. Statement of Cash Flows Your supervisor has provided you with the following statement of cash flows, prepared using the indirect method. Recall that the statement of cash flows consists of three sections: cash flows from operating activities, cash flows from (used for) investing activities, and cash flows from (used for) financing activities. Review the statement, and then proceed to the next panel. Check My Work Previous Progress: 2/2 items Chs 13 & 16 Review Assessment(MPS) Calculator N1 - Championship Boxing, Inc. Statement of Cash Flows For the Year Ended December 31, 2048 Cash flows from operating activities: Net income $186,540.00 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation 18,400.00 Gain on sale of investments (50,000.00) Changes in current operating assets and liabilities: Increase in accounts receivable (25,390.00) Increase in inventories (33,450.00) Increase in accounts payable 41,130.00 Decrease in accrued expenses payable (12,470.00) Net cash flow from operating activities $124,760.00 12 Cash flows from (used for) investing activities: 13 Cash from sale of investments $280,000.00 Cash used for purchase of land (326,000.00) (152,000.00) 15 Cash used for purchase of equipment 16 Net cash flow used for investing activities (198,000.00) Cash flows from (used for) financing activities: Cash from sale of common stock $187,500.00 Cash used for dividends (91,200.00) Check My Work Previous Progress: 2/2 items Chs 13 & 16 Review Assessment[MPs) Calculator Assets 3 Cash $585,920.00 Accounts receivable (net) 230,950.00 5 Inventories 618,320.00 Investments 0.00 7 Land 0.00 8 Equipment 705,120.00 Accumulated depreciation equipment (166,400.00) 10 Total assets Liabilities 13 Accounts payable (merchandise creditors) $391,800.00 14 Accrued expenses payable (operating expenses) 41,150.00 Dividends payable 19,200.00 16 Total liabilities $498,080.00 Stockholders' Equity 19 Common stock (54 par) 20 Paid-in capital in excess of par 280,000.00 21 Retained earnings 1,290,840.00 22 Total stockholders' equity $1,858,340.00 23 Total liabilities and stockholders' equity Check My Work Previous Progress: 2/2 items
