Spears 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 how to create statement of cash flows for the year ended June 30, 2017.

Download the excel spreadsheet found in the link below.

Required:

1. HOw do you prepare 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 Spears 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 financial items

Information Provided

You are the accountant for Spears Construction Company, a large construction company in Colorado. You have been presented with the following financial information for Spears and asked to prepare the Statement of Cash Flows for the year ended June 30, 2017 1. Facts - Information taken from Spears' accounting records and additional information regarding the cash flows as of June 30, 2017. 2. Worksheet - Worksheet template (also see Example 21.3a in text). 3. Cash Flows - Statement of Cash Flows template (also see Example 21.3b in text).

DebitsAccount Balances

June 30, 2016 June 30, 2017

Cash 397,520 1,128,203

A/R 110,000 162,500

Marketable Securities (at cost) 11,700 24,700

Allowance for Change in Value 1500 2800

Construction in process 185,625 526,500

Pepaid Expenses 49,500 13,000

Investments (Long Term) -- 17,550

Leased Equipment-- 26,000

Building33,000 --

Deferred tax asset 5,913 2860

Land 13,650 13650

Total 808,408 1,917,763

CREDITS

Allowance for doubtful accounts 6,600 5,850

Accounts Payable 96,250 273,000

Deferred tax liability 1,100 4290

Income Taxes Payable 3850 11,700

Note Payable (long-term) 3500 --

Accumulated Depreciation on Building 2750 --

Accumulated Depreciation on Leased Asset -- 3900

Lease obligation -- 23,400

Interest payable on lease obligation -- 2340

Bonds payable Premium on bonds payable -- 60000

Billings on construction in process -- 1140

Pension liability 165000 422,500

Convertible preferred stock, $100 par 165000 520000

Common Stock, $10 par 9000 --

Additional Paid-in Capital 16,000 26500

Unrealized Increase in Value of Marketable Securities 8700 13700

Retained Earnings 1500 2800

Totals 329,158 546643

FACTS:

Additional information:

a. Dividends declared and paid totaled $1,500.

b. 300 shares 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 theconversion.

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 $13,000. The portfolio was increased by $1,300 to a $27,500 fair value at year-end by adjusting the related allowance account.

f. During the year, a 25% interest in Ricochet Co. was purchased as an investment for $13,000. Ricochet reported $24,000 in net income for the year and paid dividends of $1,450 to Spears.

g. $4,800 of accounts receivable were written off as uncollectible during the year.

h. Spears' 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 $36,000 were collected.

j. Ten-year, 10% bonds payable were sold on December 31, 2016, at 102, plus accrued interest. Discounts and premiums are amortized using the straight-line method. Interest is paid with cash semiannually.

k. Spears recorded pension expense of $470,000 for the year.

l. A lease agreement was signed on July 1st, 2016 for the use of equipment worth $26,000. Thecompany determined that the transaction should be recorded as a capital lease.

SPEARS CONSTRUCTION COMPANY

Cash Flows Worksheet

For Year Ended June 30, 2017

Account Titles Balances Change Worksheet Entries

6/30/2016 6/30/2017 (+/-) Debit/Credit

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