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The Extra Surplus Company's Balance Sheet for December 31, 2015 and the Income Statement for 2016 are shown below. Extra Surplus Company Balance Sheet December
The Extra Surplus Company's Balance Sheet for December 31, 2015 and the Income Statement for 2016 are shown below.
Extra Surplus Company | |||
Balance Sheet | |||
December 31, 2015 | |||
Assets | |||
Cash | $ | 20,000 | |
Accounts Receivable | 10,000 | ||
Inventory | 24,000 | ||
Property and Equipment, Net | 40,000 | ||
$ | 94,000 | ||
Liabilities and Stockholders Equity | |||
Accounts Payable | $ | 20,000 | |
Notes Payable, Long-Term | 10,000 | ||
Common Stock | 40,000 | ||
Retained Earnings | 24,000 | ||
$ | 94,000 | ||
Extra Surplus Company | |||
Income Statement | |||
For the Year Ended December 31, 2016 | |||
Sales | $ | 39,000 | |
Cost of Goods Sold | 9,000 | ||
Salaries and Wage Expense | 9,000 | ||
Interest Expense | 3,000 | ||
Other Expenses | 1,500 | ||
Net Income | $ | 16,500 | |
Additional data:
- Sales were $39,000; $24,000 in cash was received from customers.
- Bought new land for cash, $30,000.
- Sold other land for its book value of $15,000.
- Paid $3,000 principal on the long-term note payable and $3,000 in interest.
- Issued new shares of stock for $30,000 cash.
- Cash dividends of $5,000 were declared and paid to stockholders.
- Paid $17,500 on accounts payable.
- No inventory purchases were made; other expenses were incurred on account.
- All wages were paid in cash.
- Other expenses were on account.
Required: a. Prepare a balance sheet at December 31, 2016.
b. Prepare the statement of cash flows using the direct method. (Enter any deductions and cash outflows as a negative value.)
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