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WEEK 5: GRADED ASSIGNMENT Problem 1: Statement of Cash Flow The following comparative balance sheets and other data are for Dayton Tent & Awning Sales,
WEEK 5: GRADED ASSIGNMENT | ||||||||
Problem 1: Statement of Cash Flow | ||||||||
The following comparative balance sheets and other data are for Dayton Tent & Awning Sales, Inc.: | ||||||||
Dayton Tent & Awning Sales, Inc. | ||||||||
Comparative balance sheets | ||||||||
For Two Years Ended December 31 | ||||||||
Current | Last Year | |||||||
Assets | ||||||||
Cash | $441,800 | $332,600 | ||||||
Accounts receivable, net | 750,750 | 432,900 | ||||||
Merchandise inventory | 819,000 | 850,200 | ||||||
Prepaid Insurance | 3,900 | 5,850 | ||||||
Land | 312,000 | 351,000 | ||||||
Buildings | 2,184,000 | 1,209,000 | ||||||
Machinery and Tools | 858,000 | 468,000 | ||||||
Accumulated depreciation Machinery and Tool | -809,250 | -510,900 | ||||||
Total assets | $4,560,200 | $3,138,650 | ||||||
Liabilities and stockholders' equity | ||||||||
Accounts payable | $226,750 | 275,500 | ||||||
Accrued liabilities payable | 185,800 | 111,700 | ||||||
Long-term note payable | 56,550 | 66,300 | ||||||
Mortgage Bonds payable | 382,200 | 185,250 | ||||||
Common stock ($100 par) | 1,755,000 | 585,000 | ||||||
Paid-in capital in excess of par | 58,500 | -0- | ||||||
Retained earnings | 1,895,400 | 1,914,900 | ||||||
Total liabilities and stockholders' equity | $4,560,200 | $3,138,650 | ||||||
a) Net income for the year was $128,000. | ||||||||
b) Depreciation for the year was $356,850. | ||||||||
c) There was a gain of $7,800 on the sale of land. The land was sold for $46,800 cash. | ||||||||
d) The additional mortgage bonds were issued at face value as partial payment for a building valued at $975,000. The amount of cash paid was $778,050. | ||||||||
e) Machinery and tools were purchased for $448,500 cash. | ||||||||
f) Fully depreciated machinery with a cost of $58,500 was scrapped and written off. (hint: no cash was received for this transaction) | ||||||||
g) Additional common stock was issued at $105 per share. The total proceeds were $1,228,500. | ||||||||
h) Dividends were declared and paid (hint: calculate amount of dividends paid). | ||||||||
i) A payment was made on the long-term note, $9,750. | ||||||||
1. Calculate the difference between each year for the current assets and current liabilities. | ||||||||
Current Assets: | Current | Last Year | Difference | |||||
Current Liabilities: | ||||||||
2. Prepare a statement of cash flows under the indirect method including a schedule of non-cash investing and financing activities. | ||||||||
Dayton Tent & Awning Sales, Inc | ||||||||
Statement of Cash Flows | ||||||||
For Year Ended December 31 | ||||||||
Cash flows from operating: | ||||||||
Net Income | ||||||||
Adjustments to reconcile net income to net cash: | ||||||||
Depreciation expense | ||||||||
Total Adjustments | ||||||||
Net cash provided by operating activities | ||||||||
Cash flows from investing activities: | ||||||||
Net cash used by investing activities | ||||||||
Cash flows from financing activities: | ||||||||
Hint: Cash paid for dividends is [Beg Retained Earnings + Net Income - End Retained Earnings] | ||||||||
Net cash provided by financing activities | ||||||||
Net increase (decrease) in cash | [Operating + Investing + Financing] | |||||||
Ending Cash Balance | ||||||||
Noncash investing and financing activities: | ||||||||
Mortgage bonds issued as partial payment of building | ||||||||
Retirement of fully depreciated machinery | ||||||||
Total noncash investing and financing activities | ||||||||
Analyze this Statement of Cash Flows for Dayton Tent & Awning. | ||||||||
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