Following are comparative balance sheets for Millco Inc. at January 31 and February 28, 2020: MILLCO INC. Balance Sheets February 28 and January 31, 2020 February 28 January 31 $ 50,400 76,800 97,200 $ 224,400 $ 44,400 63,600 112,800 $ 220, 800 199, 200 (28,800) $394,800 182,400 (25, 200) $378,000 Assets Cash Accounts receivable Merchandise inventory Total current assets Plant and equipment: Production equipment Less: Accumulated depreciation Total assets Liabilities Accounts payable Short-term debt Other accrued liabilities Total current liabilities Long-term debt Total liabilities Stockholders' Equity Common stock, no par value, 48,000 shares authorized, 36,000 and 33,600 shares issued, respectively Retained earnings: Beginning balance Net income for month Dividends Ending balance Total stockholders' equity Total liabilities and stockholders' equity $ 44,400 52,800 25,200 $ 122,400 39,600 $ 162,000 $ 49,200 52,800 28,800 $ 130,800 55,200 $186,000 $ 124,800 $115,200 $ 76,800 43,200 (12,000) $ 108,000 $232,800 $394,800 $ 51,600 34,800 (9,600) $ 76,800 $ 192,000 $378,000 Required: a. Calculate the change that occurred in cash during the month. You may assume that the change in each balance sheet amount is due to a single event (for example, the change in the amount of production equipment is not the result of both a purchase and sale of equipment). Because the retained earnings section of the balance sheet is, in and of itself, an analysis of the change in the retained earnings account for the month, the row for net income and dividends should be entered as the February amount and not the change. Use the space to the right of the January 31 data to enter the difference between the February 28 and January 31 amounts of each balance sheet item. b. Prepare a statement of cash flows that explains above changes? Required A Required B Calculate the change that occurred in cash during the month. You may assume that the change in each balance sheet amount is due to a single event (for example, the change in the amount of production equipment is not the result of both a purchase and sale of equipment). Because the retained earnings section of the balance sheet is, in and of itself, an analysis of the change in the retained earnings account for the month, the row for net income and dividends should be entered as the February amount and not the change. Use the space to the right of the January 31 data to enter the difference between the February 28 and January 31 amounts of each balance sheet item. Show less MILLCO INC. Balance Sheets January 31 and February 28, 2020 February 28 January 31 Change Assets Cash $ $ 50,400 76,800 44,400 63,600 97,200 112,800 220,800 $ 224,400 $ Accounts receivable Merchandise inventory Total current assets Plant and equipment: Production equipment Less: Accumulated depreciation Total assets 199,200 (28,800) 394,800 182,400 (25,200) 378,000 $ Liabilities $ 44,400 $ 49,200 Accounts payable Short-term debt Other accrued liabilities 52,800 25,200 52,800 28,800 Total current liabilities $ 122,400 $ 130,800 39,600 55,200 $ 162,000 $ 186,000 $ 124,800 $ 115,200 Long-term debt Total liabilities Stockholders' Equity Common stock Retained earnings: Beginning balance Net income for month Dividends Ending balance Total stockholders' equity Total liabilities and stockholders' equity $ 76,800 $ 51,600 34,800 43,200 (12,000) 108,000 232,800 (9,600) 76,800 $ $ $ $ 192,000 378,000 $ Required A Required B > MILLCO INC. Statement of Cash Flows For the Month Ended February 28, 2020 Cash flows from operating activities: Add (deduct) items not affecting cash: $ 0 Cash flows from investing activities: Cash flows from financing activities: 0 $ 0
