Spreadsheet and Statement of Cash Flows

The following information was taken from Lamberson Company's accounting records:

Account Balances

Account Titles January 1,2016 December 31,2016

Debits

Cash $ 1,400 $ 2,400

Accounts Receivable (net) 2,800 2,690

Marketable Securities (at cost) 1,700 3,000

Allowance for Change in Value 500 800

Inventories 8,100 7,910

Prepaid Items 1,300 1,710

Investments (long-term) 7,000 5,400

Land 15,000 15,000

Buildings and Equipment 32,000 46,200

Discount on Bonds Payable ? 290

$69,800 $85,400

Credits

Accumulated Depreciation $16,000 $16,400

Accounts Payable 3,800 4,150

Income Taxes Payable 2,400 2,504

Wages Payable 1,100 650

Interest Payable ? 400

Note Payable (long-term) 3,500 ?

12% Bonds Payable ? 10,000

Deferred Taxes Payable 800 1,196

Convertible Preferred Stock, $100 par 9,000 ?

Common Stock, $10 par 14,000 21,500

Additional Paid-in Capital 8,700 13,700

Unrealized Increase in Value of Marketable Securities 500 800

Retained Earnings 10,000 14,100

$69,800 $85,400

Additional information for the year:

1. Sales $ 39,930
2. Cost of goods sold (19,890)
3. Depreciation expense (2,100)
4. Wages expense (11,000)
5. Other operating expenses(1,000)
6. Bond interest expense(410)
7. Dividend revenue 820
8. Gain on sale of investments700
9. Loss on sale of equipment(200)
10. Income tax expense (2,050)
11. Net income$ 4,800

Dividends declared and paid totaled $700.

On January 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.

Long-term nonmarketable investments that cost $1,600 were sold for $2,300.

The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year.

Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets.

Equipment was purchased at a cost of $16,200.

The 12% bonds payable were issued on August 31, 2016, at 97. They mature on August 31, 2026. The company uses the straight-line method to amortize the discount.

Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable.

Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.

Required

Prepare a spreadsheet to support Lamberson Company's 2016 statement of cash flows. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.

REST IS IN WORD DOCUMENT

LAMBERSON COMPANY Cash Flows Worksheet For Year Ended December 31, 2016 Account Titles Balances Worksheet Entries 01/01/2016 12/31/2016 Change Debit Debits Cash 1,400 2,400 Accounts Receivable 2,800 2,690 Marketable Securities 3,000 Noncash Accounts: 1,700 Allow for Change in 500 Value 800 Inventories 8,100 7,910 Prepaid Items 1,300 1,710 Credit Investments (longterm) 7,000 5,400 Land 15,000 15,000 Buildings and Equipment 32,000 46,200 Discount on Bonds Payable Totals 290 69,800 85,400 Accumulated Depreciation 16,000 16,400 Accounts Payable 3,800 4,150 Income taxes Payable 2,400 2,504 Wages Payable 1,100 650 Credits Interest Payable 400 Notes Payable (long3,500 term) 12% Bonds Payable 10,000 Deferred Income Taxes 800 Convertible Preferred Stock 9,000 1,196 Common Stock, $10 14,000 par 21,500 Additional Paid-in Capital 13,700 8,700 Unrealized Increase in Value of 500 Marketable Securities 800 Retained Earnings 14,100 10,000 Totals 69,800 85,400 Worksheet Entries Debit Cash Flows from Operating Activities: Net income Net income Add: Depreciation expense Add: Depreciation Add: Decrease in accounts receivable Add: Decrease in Add: Decrease in inventories Add: Decrease in Add: Increase in accounts payable Add: Increase in Add: Increase in income taxes payable Add: Increase in interest payable Add: Loss on sale of equipment Add: Increase in Add: Increase in Add: Loss on sal Credit Add: Increase in deferred taxes payable Add: Bond discou Add: Bond discount amortization Less: Increase in prepaid items Add: Increase in Less: Increase in Less: Decrease in wages payable Less: Decrease i Less: Gain on sale of investments Less: Gain on sale of investments Less: Gain on sa Cash Flows from Investing Activities: Payment for purchase of short-term marketable securities Payment for purc Proceeds from sale of long-term investments Proceeds from sale of equipment Proceeds from sa Payment for purchase of equipment Cash Flows from Financing Activities: Payment of dividends Payment of divide Proceeds from sa Payment for purc Proceeds from issuance of 12% bonds Proceeds from is Investing and Financing Activities Not Affecting Cash: Issuance of common stock to convert preferred stock Issuance of comm Conversion of preferred stock to common stock Conversion of pre Issuance of common stock to pay long-term note Payment of long-term note by issuing common stock Issuance of comm Payment of long-t Net increase in cash Net increase in ca Totals Prepare the statement of cash flows. LAMBERSON COMPANY Statement of Cash Flows For Year Ended December 31, 2016 Operating Activities: Net income $ Net income Adjustment for noncash income items: Add: Depreciation expense Add: Depreciation Add: Bond discount amortization Add: Bond discou Add: Loss on sale of equipment Add: Loss on sal Add: Increase in deferred taxes payable Less: Gain on sale of investments Add: Increase in Less: Gain on sa Adjustments for cash flow effects from working capital items: Decrease in accounts receivable Decrease in acco Decrease in inventories Decrease in inven Increase in prepaid items Increase in prepa Increase in accounts payable Increase in accou Decrease in wages payable Decrease in w ag Increase in income taxes payable Increase in incom Increase in interest payable Increase in intere $ Net cash provided by operating activities Investing Activities: Payment for purchase of short-term marketable $ securities Payment for purc Proceeds from sale of long-term investments Proceeds from sa Proceeds from sale of equipment Proceeds from sa Payment for purchase of equipment Payment for purc Net cash used for investing activities Financing Activities: Proceeds from issuance of 12% bonds Proceeds from is Payment of dividends Payment of divide Net cash provided by financing activities $ Net increase in cash $ Net increase in ca Cash, January 1, 2016 Cash, December 31, 2016 $ Compute the cash flow from operations to sales ratio and the profit margin ratio for 2016. Round your answers to one decimal place. Cash flows from operations ratio : % Profit margin: %