Question
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
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. teach me how to create statement of cash flows for the year ended June 30, 2017.
Download the excel spreadsheet found in the link below.
Required:
- teach me how I create 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.
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: a. Dividends declared and paid totaled $650. b. 300 shares of common stock (at par) were issued for cash. c. 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. d. The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the fiscal year. e. 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. f. 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. g. $5,000 of accounts receivable were written off as uncollectible during the year. h. Smart's inventory consists of Construction-in-Process in excess of the Billings on Construction-in-Process account balance. i. A building was destroyed by fire during the year and insurance proceeds of $26,000 were collected. j. 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. k. Smart recorded pension expense of $350,000 for the year. l. 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.
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