Problem 23 4 Crane Company had the following information available at the end of 2017 CRANE COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2017 AND 2016 2017 2016 Cash $9,930 $4,010 Accounts receivable 20,450 12,910 Short term investments 22,070 30,030 Inventory 42,300 35,310 Prepaid rent 3,020 12,090 Prepaid insurance 2,090 90 Supplies 1,010 75 Land 124,270 175,470 Buildings 353,500 353,500 Accumulated depreciationbuildings (105,150 ) (87,890 ) Equipment 526,140 396,090 Accumulated depreciationequipment (129,450 ) (111,310 ) Patents 45,390 49,550 Total assets $915,570 $869,925 Accounts payable $21,800 $32,080 Income taxes payable 5,020 3,970 Salaries and wages payable 4,950 3,000 Short term notes payable 10,060 10,060 Long term notes payable 60,060 69,370 Bonds payable 397,380 397,380 Premium on bonds payable 30,200 32,145 Common stock 239,140 221,530 Paid in capital in excess of parcommon stock 24,850 17,400 Retained earnings 122,110 82,990 Total liabilities and stockholders equity $915,570 $869,925 CRANE COMPANY INCOME STATEMENT AND DIVIDEND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2017 Sales revenue $1,157,060 Cost of goods sold 748,200 408,860 Gross margin Operating expenses Selling expenses $78,550 Administrative expenses 156,290 Depreciation Amortization expense 39,560 Total operating expenses 274,400 Income from operations 134,460 Other revenues expenses Gain on sale of land 7,950 Gain on sale of short term investment 3,980 Dividend revenue 2,380 Interest expense (51,810 ) (37,500 ) Income before taxes 96,960 Income tax expense 39,460 Net income 57,500 Dividends to common stockholders (18,380 ) To retained earnings $39,120 Prepare a statement of cash flows for Crane Company using the direct method accompanied by a reconciliation schedule Assume the short term investments are debt securities, classified as available for sale (Show amounts in the investing and financing sections that decrease cash flow with either a sign e g 15,000 or in parenthesis e g (15,000) )

The Answer is in the image, click to view ...

Answered step by step

Verified Expert Solution

Link Copied!

Question

1 Approved Answer

Posted on Oct 01, 2024

Problem 23-4 Crane Company had the following information available at the end of 2017. CRANE COMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2017 AND

Problem 23-4

Crane Company had the following information available at the end of 2017.

CRANECOMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2017 AND 2016
	2017		2016
Cash	$9,930		$4,010
Accounts receivable	20,450		12,910
Short-term investments	22,070		30,030
Inventory	42,300		35,310
Prepaid rent	3,020		12,090
Prepaid insurance	2,090		90
Supplies	1,010		75
Land	124,270		175,470
Buildings	353,500		353,500
Accumulated depreciationbuildings	(105,150	)	(87,890	)
Equipment	526,140		396,090
Accumulated depreciationequipment	(129,450	)	(111,310	)
Patents	45,390		49,550
Total assets	$915,570		$869,925

Accounts payable	$21,800		$32,080
Income taxes payable	5,020		3,970
Salaries and wages payable	4,950		3,000
Short-term notes payable	10,060		10,060
Long-term notes payable	60,060		69,370
Bonds payable	397,380		397,380
Premium on bonds payable	30,200		32,145
Common stock	239,140		221,530
Paid-in capital in excess of parcommon stock	24,850		17,400
Retained earnings	122,110		82,990
Total liabilities and stockholders equity	$915,570		$869,925

CRANE COMPANY INCOME STATEMENT AND DIVIDEND INFORMATION FOR THE YEAR ENDED DECEMBER 31, 2017
Sales revenue			$1,157,060
Cost of goods sold			748,200
			408,860

Gross margin
Operating expenses
Selling expenses	$78,550
Administrative expenses	156,290
Depreciation/Amortization expense	39,560
Total operating expenses			274,400
Income from operations			134,460
Other revenues/expenses
Gain on sale of land	7,950
Gain on sale of short-term investment	3,980
Dividend revenue	2,380
Interest expense	(51,810	)	(37,500	)
Income before taxes			96,960
Income tax expense			39,460
Net income			57,500
Dividends to common stockholders			(18,380	)
To retained earnings			$39,120

Prepare a statement of cash flows for Crane Company using the direct method accompanied by a reconciliation schedule. Assume the short-term investments are debt securities, classified as available-for-sale. (Show amounts in the investing and financing sections that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)