Smart Company is preparing its financial statements for the year ended June 30, 2017. The financial statements are complete except for the statement of cash flows. You have been asked to prepare a statement of cash flows for the year ended June 30, 2017.

Download the excel spreadsheet found in the link below.

Required:

Prepare a spreadsheet to support a statement of cash flows for the year ended June 30, 2017.

In the tab named ‘Journal Entries’, show in journal entry form, the entries that would be made in preparation of the statement of cash flows.

Prepare Smart Company’s statement of cash flows for the year ended June 30, 2017. Prepare the statement of cash flows using the indirect method. Note: For full credit, you must prepare the statement of cash flow in good form with all necessary disclosures, including disclosures about noncash financing and investing activities.

Submit a well-formatted electronic file, with your last name as the file name. For example, Lastname_PortfolioProject.xls.

You are the accountant for Smart Construction Company, a large construction company in Colorado. You have been presented with the following financial information for Smart and asked to prepare the Statement of Cash Flows for the year ended June 30, 2017. You will complete all work for the project in this excel file, which includes the following tabs:

Facts - Information taken from Smart's accounting records and additional information regarding the cash flows as of June 30, 2017.

Worksheet - Worksheet template (also see Example 21.3a in text).

Cash Flows - Statement of Cash Flows template (also see Example 21.3b in text).

	Account Balances
	June 30, 2016	June 30, 2017
Debits
Cash	$ 361,700	$ 880,550
Accounts Receivable	100,000	125,000
Marketable Securities (at cost)	11,700	13,000
Allowance for Change in Value	1,500	1,800
Construction in Process	168,750	405,000
Prepaid Expenses	45,000	10,000
Investments (long-term)	-	13,500
Leased Equipment	-	20,000
Building	30,000	-
Deferred tax asset	5,375	2,200
Land	10,500	10,500
Discount on Bonds Payable	-	1,305
Totals	734,525	1,482,855

Credits
Allowance for doubtful accounts	$ 6,000	$ 4,500
Accounts Payable	87,500	210,000
Deferred tax liability	1,000	3,300
Income Taxes Payable	3,500	9,000
Note Payable (long-term)	3,500	-
Accumulated Depreciation on Building	2,500	-
Accumulated Depreciation on Leased Asset	-	3,000
Lease obligation	-	18,000
Interest payable on lease obligation	-	1,800
Interest payable (Bonds)	-	1,800
Bonds payable	-	45,000
Billings on contruction in process	150,000	325,000
Pension liability	150,000	400,000
Convertible preferred stock, $100 par	9,000	-
Common Stock, $10 par	14,000	24,500
Additional Paid-in Capital	8,700	13,700
Unrealized Increase in Value of Marketable Securities	1,500	1,800
Retained Earnings	297,325	421,455
Totals	734,525	1,482,855

Additional information:

Dividends declared and paid totaled $650.

300 shares of common stock (at par) were issued for cash.

On July 1, 2016, convertible preferred stock that had originally been issued at par value were

converted into 500 shares of common stock. The book value method was used to account for the conversion.

The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the fiscal year.

Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $14,800 fair value at year-end by adjusting the related allowance account.

During the year, a 30% interest in Ricochet Co. was purchased as an investment for $9,500. Ricochet reported $20,000 in net income for the year and paid dividends of $2,000 to Smart.

$5,000 of accounts receivable were written off as uncollectible during the year.

Smart’s inventory consists of Construction-in-Process in excess of the Billings on Construction-in-Process account balance.

A building was destroyed by fire during the year and insurance proceeds of $26,000 were collected.

The 12% bonds payable were issued on February 28, 2017, at 97. They mature on February 28, 2027. The company uses the straight-line method to amortize bond premiums and discounts.

Smart recorded pension expense of $350,000 for the year.

A lease agreement was signed on July 1st, 2016 for the use of equipment worth $20,000. The company determined that the transaction should be recorded as a capital lease.

Cash Flows Worksheet
For Year Ended June 30, 2017
	Balances		Change		Worksheet Entries
Account Titles	6/30/2016	6/30/2017	Increase (Decrease)		Debit		Credit
Debits
Noncash Accounts:
Credits
Cash Flows from Operating Activities:
Cash Flows from Investing Activities:
Cash Flows from Financing Activities
Investing and Financing Activities Not Affecting Cash:
Net Increase in Cash
Totals

Smart Construction Company
Statement of Cash Flows
For Year Ended June 30, 2017
Operating Activities:
Net Income
Adjustments for noncash income items:
Adjustments from cash flow effect from working capital items:
Net cash provided (used) by operating activities
Investing activities:
Net cash provided (used) by investing activities
Financing Activities:
Net cash provided (used) by financing activities
Net increase in cash (see Schedule 1)
Cash, June 30, 2016
Cash, June 30, 2017
Schedule 1: Investing and Financing Activities Not Affecting Cash