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QUESTION 23 Statement of Cash Flows: Scroll down to complete all parts of this task. Presented below are the balance sheet accounts of Kern, Inc.
QUESTION 23
- Statement of Cash Flows: Scroll down to complete all parts of this task. Presented below are the balance sheet accounts of Kern, Inc. as of December 31, year 4 and year 3 and their net changes.
Assets Year 4 Year 3 Net change Cash $ 471,000
$ 307,000
$ 164,000
Marketable equity securities, at cost 150,000
250,000
(100,000)
Allowance to reduce marketable equity securities to market (10,000)
(25,000)
15,000
Accounts receivable, net 550,000
515,000
35,000
Inventories 810,000
890,000
(80,000)
Investment in Word Corp., at equity 420,000
390,000
30,000
Property, plant, and equipment 1,145,000
1,070,000
75,000
Accumulated depreciation (345,000)
(280,000)
(65,000)
Patent, net 109,000
118,000
(9,000)
Total assets $3,300,000
$3,235,000
$ 65,000
Liabilities and Stockholders' Equity A/P and accrued liabilities $ 845,000
$ 960,000
$(115,000)
Note payable, long term 600,000
900,000
(300,000)
Deferred tax liability 190,000
190,000
-- Common stock, $10 par value 850,000
650,000
200,000
Additional paid-in capital 230,000
170,000
60,000
Retained earnings 585,000
365,000
220,000
Total liabilities and stockholders' equity $3,300,000 $3,235,000 $ 65,000 - On January 2, year 4, Kern sold equipment costing $45,000, with a carrying amount of $28,000, for $18,000 cash.
- On March 31, year 4, Kern sold one of its marketable equity security holdings for $119,000 cash.
- There were no other transactions involving marketable equity securities.
- On April 15, year 4, Kern issued 20,000 shares of its common stock for cash at $13 per share.
- On July 1, year 4, Kern purchased equipment for $120,000 cash.
- Kern's net income for year 4 is $305,000. Kern paid a cash dividend of $85,000 on October 26, year 4.
- Kern acquired a 20% interest in Word Corp.'s common stock during year 1. There was no goodwill attributable to the investment which is appropriately accounted for by the equity method. Word reported net income of $150,000 for the year ended December 31, year 4. No dividend was paid on Word's common stock during year 4.
Item Amount Amount Cash flows from operating activities: Net income [1____] Adjustments to reconcile net income to net cash provided by operating activities: Depreciation [2____] Amortization of patent [3____] Loss on sale of equipment [4____] Equity in income of Word Corp. [5____] Gain on sale of marketable equity securities [6____] Decrease in allowance to reduce marketable equity securities to market [7____] Increase in accounts receivable [8____] Decrease in inventories [9____] Decrease in accounts payable and accrued liabilities [10___] Net cash provided by operating activities [11___] Cash flows from investing activities: Sale of marketable equity securities [12___] Sale of equipment [13___] Purchase of equipment [14___] Net cash provided by investing activities [15___] Cash flows from financing activities: Issuance of common stock [16___] Cash dividend paid [17___] Payment on note payable [18___] Net cash used in financing activities [19___] Net increase in cash [20___] Cash at beginning of year 307,000 Cash at end of year [21___] -- Font family --Andale MonoArialArial BlackBook AntiquaComic Sans MSCourier NewGeorgiaHelveticaImpactSymbolTahomaTerminalTimes New RomanTrebuchet MSVerdanaWebdingsWingdings -- Font size --1 (8pt)2 (10pt)3 (12pt)4 (14pt)5 (18pt)6 (24pt)7 (36pt) -- Format --HeadingSub Heading 1Sub Heading 2ParagraphFormatted Code -- Font family -- -- Font size -- Path: p
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