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. create a statement of cash flows for the year ended June 30, 2017.

Download the excel spreadsheet found in the link below.

Required:

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

2.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.

3.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.

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:

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.

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