eBook

Question Content Area

$($Appendix $11$B$)$ Using a Spreadsheet to Prepare a Statement of Cash Flows

Jane Bahr, a controller of Endicott & Thurston, provided the following balance sheet information:

Endicott & Thurston Associates

Balance Sheet

Jan. $1$ Dec. $31$

ASSETS

Current assets:

Cash $$17,000$ $$2,000$

Accounts receivable $219,00078,000$

Prepaid rent $104,00029,000$

Total current assets $$340,000$ $$109,000$

Long$-$term investments $40,00051,000$

Property, plant, and equipment:

Equipment, computing $$362,000$ $$495,000$

Furniture $365,000400,000$

$$727,000$ $$895,000$

Accumulated depreciation $(554,000)(367,000)$

Net property, plant, and equipment $173,000528,000$

Total assets $$553,000$ $$688,000$

LIABILITIES AND EQUITY

Current liabilities:

Accounts payable $$58,000$ $$56,000$

Salaries payable $105,00089,000$

Total current liabilities $$163,000$ $$145,000$

Long$-$term liabilities:

Notes payable $105,00080,000$

Bonds payable $0140,000$

Total liabilities $$268,000$ $$365,000$

Equity:

Common stock $$225,000$ $$225,000$

Retained earnings $60,00098,000$

Total equity $285,000323,000$

Total liabilities and equity $$553,000$ $$688,000$

Additional Information:

Computing equipment with a cost of $$250,000$ and accumulated depreciation of $$230,000$ was sold for $$5,000.$ New computing equipment was purchased for $$383,000.$

New office furniture was purchased at a cost of $$35,000.$

Depreciation expense was $$43,000.$

Investments costing $$20,000$ were sold for cash at a loss of $$2,000.$ Additional investments were purchased for $$31,000$ cash.

A $$25,000$ principal payment on the long$-$term note was made.

A portion of the cash needed to purchase computing equipment was secured by issuing bonds payable for $$140,000$ cash.

Net income was $$76,000$ and dividends were $$38,000.$

Required:

$1.$ Using the data above and Exhibit $10$ as a guide, create a spreadsheet to prepare a statement of cash flows.

$2.$ Using your spreadsheet, construct the Statement of Cash Flows below. Assume Endicott & Thurston use the indirect method. Use a minus sign when entering negative cash flows.

Endicott and Thurston Associates

Statement of Cash Flows

For the year ending December $31$

Cash flows from operating activities:

$$-$ Select $-$

Adjustments to reconcile net income to net cash provided by operating activities:

$$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

Cash flows from investing activities:

$$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

Cash flows from financing activities:

$$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$-$ Select $-$

$$-$ Select $-$

Cash, Jan. $1$ fill in the blank $41$

Cash, Dec. $31$ $fill in the blank $42$