Accounting, Analysis, and Principles (Part Level Submission) The income statemen

Question

Accounting, Analysis, and Principles (Part Level Submission) The income statement for the year ended December 31, 2017, for Metlock Manufacturing Company contains the following condensed information. METLOCK CO INCOME STATEMENT Revenues Operating expenses (excluding depreciation) Depreciation expense Income before income tax Income tax expense Net income $6,567,000 $4,904,000 854,000 5,758,000 809,000 364,050 444,950 Included in operating expenses is a $15,000 loss resulting from the sale of machinery for $254,000 cash. The company purchased machinery at a cost of $724,000. Metlock reports the following balances on its comparative balance sheets at December 31 METLOCK CO COMPARATIVE BALANCE SHEETS (PARTIAL) 2017 2016 Cash Accounts receivable Inventon Accounts payable $639,950 $114,000 769,000 594,000 826,000 855,000 517,000 495,000

Explanation / Answer

Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities: Net income 444950 Adjustments to reconcile net income to Net cash provided by operating activities Depreciation expense 854000 Loss on sale of machine 15000 Increase in Accounts receivable -175000 Decrease in inventory 29000 Increase in accounts payable 22000 745000 Net cash provided by operating activities 1189950 Cash Flows from Investing Activities: Purchase of Machinery -724000 Cash proceeds from Sale of machinery 254000 Net Cash used by Investing Activities -470000 Cash Flows from Financing Activities Payment of Cash Dividends -194000 Net Increase in Cash 525950 Cash at Beginning of Period Dec 31,2016 114000 Cash at End of Period Dec 31,2017 639950

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