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Comparative balance sheets for Byron Manufacturing as of December 31, 20Y8 and 20Y7 are shown. Complete the Changes column to determine net cash flows during

Comparative balance sheets for Byron Manufacturing as of December 31, 20Y8 and 20Y7 are shown. Complete the Changes column to determine net cash flows during the year.

Byron Manufacturing Balance Sheets As of December 31, 20Y8 and 20Y7
Assets 20Y8 20Y7
Current assets:
Cash 5,390 9,420
Accounts receivable 10,410 9,060
Inventory 19,880 18,520
Total current assets 35,680 37,000
Property, plant, and equipment
Building 500,000 500,000
Equipment 279,000 272,200
779,000 772,200
Accumulated depreciation (147,550) (119,900)
Net property, plant, and equipment 631,450 652,300
Total assets 667,130 689,300
Liabilities and Equity
Current liabilities:
Accounts payable 55,340 36,090
Salaries payable 9,680 11,900
Income taxes payable 1,300 9,810
Total current liabilities 66,320 57,800
Long-term liabilities:
Bonds payable 353,000 397,000
Equity:
Common stock 180,000 148,000
Retained earnings 67,810 86,500
Total equity 247,810 234,500
Total liabilities and equity 667,130 689,300

Additional information needed to prepare the statement of cash flows using the indirect method:

  1. Net income was $2,840
  2. Byron paid $21,530 in cash dividends
  3. Byron issued $47,370 in bonds payable for cash
  4. Byron retired $91,370 in bonds with cash
  5. No fixed assets were sold or disposed of during the period

Now prepare the statement of cash flows for Byron Manufacturing using the indirect method. Select Increase or Decrease and enter the amounts.

Byron Manufacturing Spreadsheet to Prepare the Statement of Cash Flows For the Year Ended December 31, 20Y8
Beginning Increase/Decrease Ending
Balance Sheet Accounts Balance Debit Credit Balance
Cash (m)
Accounts receivable 9,060 (h) 1,350 10,410
Inventory 18,520 (i) 19,880
Building 500,000 500,000
Equipment 272,200 (b) 279,000
Accumulated depreciation 119,900 (c) 147,550
Accounts payable 36,090 19,250 (j) 55,340
Salaries payable 11,900 (k) 9,680
Income taxes payable 9,810 (l) 8,510 1,300
Bonds payable 397,000 (e) (d) 353,000
Common stock 148,000 32,000 (f) 180,000
Retained earnings 86,500 (g) (a) 67,810
Increase/Decrease in Cash
Statement of Cash Flows Debit Credit
Cash flow from operating activities
Net income (a)
Adjustments to reconcile net income to net cash flow from operating activities
Depreciation expense (c)
Increase in accounts receivable 1,350 (h)
Increase in inventory (i)
Increase in accounts payable (j) 19,250
Decrease in salaries payable (k)
Decrease in income taxes payable 8,510 (l)
Cash flows from investing activities
Purchase equipment (b)
Cash flows from financing activities
Issued bonds payable (d)
Retired bonds payable (e)
Issued common stock (f) 32,000
Paid dividend (g)
Net increase (decrease) in cash (m)
266,280 266,280

Now you can prepare the Statement of Cash Flows using the indirect method. Fill in the Statement based on the spreadsheet. Select Increase or Decrease and enter the amounts.

Byron Manufacturing Statement of Cash Flows For the Year Ended December 31, 20Y8
Cash flows from operating activities:
Net income $
Adjustments to reconcile net income to net cash flow from operating activities:
Depreciation expense $
Increase in accounts receivable (1,350)
Increase in inventory
Increase in accounts payable 19,250
Decrease in salaries payable
Decrease in income taxes payable (8,510) 33,460
Net cash provided by operating activities $ 36,300
Cash flows from investing activities:
Purchase of equipment $ (6,800)
Net cash used for investing activities (6,800)
Cash flows from financing activities:
Proceeds from issuance of bonds payable $
Retired bonds payable (91,370)
Issued common stock
Payment of dividends (21,530)
Net cash used for financing activities (33,530)
Net increase (decrease) in cash $
Cash, 1/1/20Y8
Cash, 12/31/20Y8 $

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