Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Erroneous Statement of Cash Flows Ryan Company's bookkeeper prepared the following 2016 statement of cash flows: Flows of Cash Statement December 31, 2016 Sources (Inflows)

Erroneous Statement of Cash Flows

Ryan Company's bookkeeper prepared the following 2016 statement of cash flows:

Flows of Cash Statement December 31, 2016
Sources (Inflows) of Cash
Net Source from Operations
Net income $47,800
Add: Cash receipt from sale of land 6,500
Inflow from issuing 10% bonds payable 25,000
Depreciation expense 13,200
Reduction in inventory 1,900
Less: Outflow to buy equipment (16,400)
Increase in prepaid expenses (700)
Cash (principal) paid on long-term note (9,500)
ordinary gain (2,000)
Total source from operations $65,800
Other Sources (Inflows) of Cash
Loss on sale of land $2,300
Increase in accounts payable 1,000
Cash from issuing preferred stock 38,700
Patent amortization expense 2,100
Total other sources of cash 44,100
Sources (Financing) Not Affecting Cash
Issuance of common stock for patent 11,000
Total inflows of cash $120,900
Uses (Outflows) of Cash
To purchase building $(62,000)
Increase in accounts receivable (7,800)
For acquiring marketable securities (7,100)
Decrease in income taxes payable (1,400)
Total uses of cash (78,300)
Uses (Investing) Not Affecting Cash
Acquisition of patent by issuing common stock (11,000)
Net inflow before dividends $ 31,600
Less: Cash dividends (24,000)
Net increase in cash $7,600
Cash, January 1, 2016 15,300
Cash, December 31, 2016 $22,900

After a thorough investigation, you have determined that the amounts of the items listed on the statement are correct. However, you notice several items that are incorrectly classified and reported.

Required

Prepare a corrected 2016 statement of cash flows for the Ryan Company. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.

Operating Activities

________________ __________

Adjustment for non cash income items:

________________ __________

________________ __________

________________ __________

________________ __________

Adjustments for cash flow effects from working capital items:

________________ __________

________________ __________

________________ __________

________________ __________

________________ __________

Net cash provided by operating activities ____________

Investing Activities:

________________ __________

________________ __________

________________ __________

________________ __________

Net cash used for investing activities _________

Financing Activities:

________________ __________

________________ __________

________________ __________

________________ __________

Net cash provided by financing activies _________

Net increase in cash _________

Cash, january 1, 2016 _________

Cash, december 31, 2016 _________

Investing and Financing Activities not Affecting Cash

Investing Activities:

Acquistion of patent by issuing commons stock ______________

Financing Activities:

Issuance of common stock for patent ____________

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

Investing Amid Low Expected Returns Making The Most When Markets Offer The Least

Authors: Antti Ilmanen

1st Edition

1119860199, 978-1119860198

More Books

Students also viewed these Accounting questions

Question

=+Journalize the entries to record the foregoing transactions.

Answered: 1 week ago