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. You have been asked to prepare a statement of cash flows for the year ended June 30, 2017.

Required:

Prepare 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 Companys 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.

FACTS:

					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. Smarts 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.