Mastery 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, financial statements are being prepared, but a computer malfunction of the company's new BOX-9000 computer has inadvertently erased parts of the company's balance sheet, along with almost all related data except the company's statement of cash flows. The IT department is working to retrieve earlier backups, but esti that the reconstruction of the data will take about 24 hours 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 flows (rather than the direct method), so your new supervisor believes the missing data for the balance sheet can be prepared using the statement of cash flows. are assigned this task, since you were top 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 $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 consiste three sections: cash flows from operating activities, cash flows from investing activities, 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, 2048 Cash flows from (used for) operating activities: Net Income $186,540 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation 18,400 Calculator Net Income $186,540 18,400 (50,000) (25,370) (33,450) 41,070 (12,480) $124,710 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 Net cash flow used for investing activities Cash flows from (used for) financing activities: Cash received from sale of common stock Cash paid for dividends Net cash flow from financing activities Net increase in cash Cash balance, January 1, 2078 Cash balance, December 31, 2078 $280,000 (326,000) (152,000) (198,000) $187,500 (91,200) 96,300 $23,010 585,920 $608,930 Balance Sheet Using the information on above, complete the following comparative balance sheet. Assets $585,920 Cash Accounts receivable (net) 230,950 Inventories 618,420 0 Investments 0 Land Equipment 705,200 Accumulated depreciation equipment (166,400) Total assets Liabilities $391,830 41,150 Accounts payable (merchandise creditors) Accrued expenses payable (operating expenses) Dividends payable Total liabilities 19,200 $498,050 $100,000 Stockholders' Equity Common stock, $4 par Pald-in capital in excess of por 280,000 Retained earnings Total stockholders' equity $1,858,500 Total liabilities and stockholders' equity Accounting numeric field