Statement preparation: 19 Editing Use Exhibit 10-7, page 432 of the textbook as a helpful TEMPLATE. Your answer will follow this form but you may have more or fewer adjustments depending on the actual situation, ignore the lines m Sale of equipment, purchase of investment, sale of investment as not covered in our class Statement of Cash Flows for the Year Ended December 31, 0008 Net Income 184 Credit card receivables (decrease) Accounts receivable (decrease) Inventory (decrease) Prepaid expense (increase) Accounts payable (increase) Accrued payroll (increase) Tax payable (decrease) Depreciation expense Net Cash Flow Adjustments Net Cash Flow, Operating Activities Cash flow adjustments investing activities: Purchase of equipmen Sale of equipment Purchase of investment Sale of investment 0 5 1,650 750 1.700 100) 2,000 800 1.200 144,200 (520,000) 3,000 (125,000) 25.000 $141,100 200 149,800 $290,900 .00 Net Cash Flow, Investing Activities Cash flow adjustments financing activities: Reduction of mortgage Redeem capital stock Borrow additional long-term debt Dividends paid Net Cash Flow, Financing Activities Net cash flow increase Cash balance, December 11, 0007 Cash balance, December 31,0008 (117,000 14,300) 9,000 10,000 DO 154.200 Herds the Ranswer? This is your Degaviny Cand This is your Enting Cash 160.5001 4,400 25.200 20 Additional information from the motel's income statement Net income for 2008 was 56,800 Annual depreciation expense for 2008 was $12,000 building and future and ment Dividends paid to shareholders in 2008 was $1.200 Technical note: owing to the presentation of the Motel's balance sheet you need to know that duidends were paid. The motel provided a separate Statement of Retained farnings that showed the dividends in clen, we ooolly combined the Statement of Red tamings in the Shareholders' Equity section of the balance sheet sa that included beginning retained eamings plus current year f income minus dividends; compute ending retained earnings, off on the standard balance sheet at the Change in fetained earnings from 2007 to 2008 find 526,400-22,800-53000 53200 of dividends pod 500 of Income for 200 Using the comparative balance sheet and the additional information, precare a Matement of Cach P uning Exhibit 10.7 as your temp Before preparing your Statement of Cash Flow, whwer these questions, as they form the " your Statement of Cash Flow Then in Step 4, use the Ext 107to prepare y Statement of Cash Flows for the year ended 12/11/2008 1. What was the amount of Cathan Hard as of 12/31/2007 this is coded ging Ca 2. What was the amount of Cash on hand as of 12/31/2008 is adding 1 What was the change in Cash Flow between 12/31/2007 12/11/2008 4. Ove the Exer 107 to performed snement of Cen flown the year ended 12/51/2008 twel Motel's two-year comparative balance sheet: Assets Current Assets Cash Credit card receivables Accounts receivable. Inventory Marketable securities Prepaid expenses Total Current Assets Property, Plant & Equipment Land Building Accum, depreciation, building Furniture & equipment Accum. Depreciation, furniture & equipment Total Property, Plant & Equipment 12-31-07 12-31-08 $ 4,100 $ 5.200 4,700 5,500 1,200 700 3,000 3,600 8,000 7,000 1,200 1,500 $22.200 $ 23,500 $ 30,000 150,000 $ 30,000 150,000 (41,900) (50,200) 22,700 25,400 15,400) 19,100) $145,400 $136,100 $167,600 $159,500 Total Assets Liabilities & Stockholders' Equity Current Liabilities Accounts payable $ 6,900 $ 7,000 Accrued expenses payable 1,400 1,700 Income taxes payable Total Current Liabilities Long-term Liabilities Long-term mortgage payable Total Liabilities 2,000 Current portion of mortgage payable 1.500 11,500 10,400 21,800 $ 20,600 100,000 89.600 $121,800 $110,200 Stockholders' Equity Capital stock, common 23,000 23,000 Retained earnings 22.800 26,400 Total Stockholders' Equity 545,800 $.49,400 Total Liabilities & Stockholders' Equity $167,600 $159,600