Question
The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is as follows: 1 Dec. 31, 20Y3 Dec. 31, 20Y2 2 Assets
The comparative balance sheet of Navaria Inc. for December 31, 20Y3 and 20Y2, is as follows:
1 |
| Dec. 31, 20Y3 | Dec. 31, 20Y2 |
2 | Assets |
|
|
3 | Cash | $155,000.00 | $150,000.00 |
4 | Accounts receivable (net) | 450,000.00 | 400,000.00 |
5 | Inventories | 770,000.00 | 750,000.00 |
6 | Investments | 0.00 | 100,000.00 |
7 | Land | 500,000.00 | 0.00 |
8 | Equipment | 1,400,000.00 | 1,200,000.00 |
9 | Accumulated depreciation-equipment | (600,000.00) | (500,000.00) |
10 | Total assets | $2,675,000.00 | $2,100,000.00 |
11 | Liabilities and Stockholders Equity |
|
|
12 | Accounts payable | $340,000.00 | $300,000.00 |
13 | Accrued expenses payable | 45,000.00 | 50,000.00 |
14 | Dividends payable | 30,000.00 | 25,000.00 |
15 | Common stock, $4 par | 700,000.00 | 600,000.00 |
16 | Paid-in capital: Excess of issue price over parcommon stock | 200,000.00 | 175,000.00 |
17 | Retained earnings | 1,360,000.00 | 950,000.00 |
18 | Total liabilities and stockholders equity | $2,675,000.00 | $2,100,000.00 |
The income statement for the year ended December 31, 20Y3, is as follows:
1 | Sales |
| $3,000,000.00 |
2 | Cost of merchandise sold |
| 1,400,000.00 |
3 | Gross profit |
| $1,600,000.00 |
4 | Operating expenses: |
|
|
5 | Depreciation expense | $100,000.00 |
|
6 | Other operating expenses | 950,000.00 |
|
7 | Total operating expenses |
| 1,050,000.00 |
8 | Operating income |
| $550,000.00 |
9 | Other income: |
|
|
10 | Gain on sale of investments |
| 75,000.00 |
11 | Income before income tax |
| $625,000.00 |
12 | Income tax expense |
| 125,000.00 |
13 | Net income |
| $500,000.00 |
Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:
A. | The investments were sold for $175,000 cash. |
B. | Equipment and land were acquired for cash. |
C. | There were no disposals of equipment during the year. |
D. | The common stock was issued for cash. |
E. | There was a $90,000 debit to Retained Earnings for cash dividends declared. |
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.
Labels and Amount Descriptions | |
Cash used for dividends | |
Cash used for purchase of equipment | |
Cash used for purchase of land | |
Cash paid for purchase of treasury stock | |
Cash payments for income taxes | |
Cash payments for merchandise | |
Cash payments for operating expenses | |
Cash received from customers | |
Cash from sale of common stock | |
Cash from sale of investments | |
December 31, 20Y3 | |
Decrease in cash | |
Depreciation | |
For the Year Ended December 31, 20Y3 | |
Gain on sale of investments | |
Increase in cash | |
Issuance of common stock for acquisition of land | |
Issuance of common stock for purchase of equipment | |
Loss on sale of investments | |
Net cash flow from financing activities | |
Net cash flow from investing activities | |
Net cash flow from operating activities | |
Net cash flow used for financing activities | |
Net cash flow used for investing activities | |
Net cash flow used for operating activities |
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Use the minus sign to indicate cash out fiows, cash payments, decreases in cash, or any negative adjustments Navaria Inc Statement of Cash Flows For the Year Ended December 31, 20Y3 1 Cash flows from operating activities: Cash flows from (used for) investing activities: 10 12 13 Cash flows from (used for) financing activities: 15 16 17 19 Cash at the beginning of the year 20 Cash at the end of the year
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