Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Question 4 Martinez Inc., had the following condensed balance sheet at the end of operations for 2016. MARTINEZ INC. BALANCE SHEET DECEMBER 31, 2016 Cash

Question 4

Martinez Inc., had the following condensed balance sheet at the end of operations for 2016.

MARTINEZ INC. BALANCE SHEET DECEMBER 31, 2016

Cash

$8,500

Current liabilities

$14,800

Current assets other than cash

29,000

Long-term notes payable

25,800

Equity invesments

20,200

Bonds payable

25,000

Plant assets (net)

67,400

Common stock

75,000

Land

40,100

Retained earnings

24,600

$165,200

$165,200

During 2017, the following occurred.

1.

A tract of land was purchased for $9,000.

2.

Bonds payable in the amount of $15,000 were redeemed at par.

3.

An additional $10,100 in common stock was issued at par.

4.

Dividends totaling $9,400 were paid to stockholders.

5.

Net income was $30,500 after allowing depreciation of $13,400.

6.

Land was purchased through the issuance of $22,500 in bonds.

7.

Martinez Inc. sold part of its investment portfolio for $12,900. This transaction resulted in a gain of $2,000 for the company. No unrealized gains or losses were recorded on these investments in 2017.

8.

Both current assets (other than cash) and current liabilities remained at the same amount.

(a) Prepare a statement of cash flows for 2017 using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).

(b) Prepare the condensed balance sheet for Martinez Inc. as it would appear at December 31, 2017. (List current assets in the order of Liquidity.)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Performance Auditing A Measurement Approach

Authors: Ronell B. Raaum CGAP CGFM, Stephen L. Morgan CIA CGAP CFE CGFM

2nd Edition

0894136607, 9780894136603

More Books

Students also viewed these Accounting questions

Question

5. Explain the supervisors role in safety.

Answered: 1 week ago