Hastery Problem: Statement of Cash Flows 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-5000 computer has inadvertently erased parts of the company's balance sheet, along with almost all related data except the company's reconstruction of the data will take about 24 hours. statement of cash flows. The IT department is working to retrieve earlier backups, but estimates that t 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 thed) so your new superviser 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 too 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 The investments were sold for $200,000 cash Equipment was acquired for $152.000 cash. Land was acquired for $325,000 cash There were no disposals of equipment during the year 12.500 shares of common stock were sold for cash during the year. There was a $96.000 debit to Retained Earnings for cash dividends declared. Statement of Cash Flows Your superior has provided you with the following statement of cash floyd, prepared using the indirect method. Recall that the statement of cash a coats of the section Resofrem sperating facing ativities Review the statement and then proceed to the next panel duties, and cub les Championship Boxing, Inc. Statement of Cash Flows For the Year Ended December 31, 2018 Cash flows from (used for) operating activities $106.545 prepared, but a computer malfunction of the company's new BOX-9000 computer has inadvertently erased parts of the company's balance sheet, along 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 h Unfortunately, financial statements are to be presented at a stockholders' meeting in one hour. The company uses the indirect method to prepare its sta 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, si 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: The investments were sold for $280,000 cash. Equipment was acquired for $152,000 cash. Land was acquired for $326,000 cash. There were no disposals of equipment during the year. 12.500 shares of common stock were sold for cash during the year. 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 c #clivities cash flows from investing activitie and cash flows from financing activities. Review the statement and then proceed to the next panel. Championship Boxing, Inc. Statement of Cash Flows For the Year Ended December 31, 2018 Cash flows from (used for) operating activities: Net income $186,540 Championship Boxing, Inc. Statement of Cash Flows For the Year Ended December 31, 20Y8 Cash flows from (used for) operating activities: Net income Adjustments to reconcile net income to net cash flow from operating activities: Depreciation Gain on sale of investments. Changes in current operating assets and liabilities: Increase in accounts receivable Increase in inventories Increase in accounts payable Decrease in accrued expenses payable Net cash flow from operating activities Cash flows from (used for) investing activities: Cash received from sale of investments Cash paid for purchase of land Cash paid for purchase of equipment $186,540 18,400 (50,000) (25,370) (33,450) 41,070 (12,470) $124,720 $280,000 (326,000) (152,000) (198,000) Net cash flow used for investing activities Cash flows from (used for) financing activities: $187,500 Cash received from sale of common stock Cash paid for dividends Net cash flow from financing activities Net increase in cash (91,200) 96,300 $23.020 Using the information on above, complete the following comparative balance sheet. Championship Boxing, Inc. Assets Cash Accounts receivable (net) Inventories Comparative Balance Sheet December 31, 20Y8 and 20Y7 20Y8 2017 $585,920 230,950 618,320 0 Investments Land Equipment 705,200 Accumulated depreciation-equipment (166,400) Total assets Liabilities Accounts payable (merchandise creditors) Accrued expenses payable (operating expenses) Dividends payable Total liabilities Stockholders' Equity Common stock, $4 par $391,830 41,160 19,200 $498,060 $100,000 0 Cash Accounts receivable (net) Inventories Investments Land Equipment Accumulated depreciation-equipment Total assets Liabilities Accounts payable (merchandise creditors) Accrued expenses payable (operating expenses) Dividends payable Total liabilities Stockholders' Equity Common stock, $4 par Paid-in capital in excess of par Retained earnings Total stockholders' equity Total liabilities and stockholders' equity 230,950 $585,920 618,320 1.01 705,200 (166,400) $391,830 41,160 19,200 $498,060 $1,858,400 $100,000 280,000 0