Exercise 23-14 Cheyenne Inc., a greeting card company, had the following stateme

Question

Exercise 23-14 Cheyenne Inc., a greeting card company, had the following statements prepared as of December 31, 2017. CHEYENNE INC. COMPARATIVE BALANCE SHEET AS OF DECEMBER 31, 2017 AND 2016 12/31/17 12/31/16 $6,100 $7,100 61,500 51,000 Short-term debt investments (available-for-sale) 34,800 17,900 39,800 59,900 4,000 155,200 129,900 Cash Accounts receivable Inventory Prepaid rent Equipment Accumulated depreciation-equipment Copyrights Total assets 5,000 (35,200) (24,800) 45,800 49,800 $313,000 $294,800 Accounts payable Income taxes payable Salaries and wages payable Short-term loans payable Long-term loans payable Common stock, $10 par Contributed capital, common stock Detainad earninnc $45,800 $39,800 6,000 3,900 9,900 68,900 100,000 100,000 30,000 57 10036 300 4,100 7,900 8,000 60,100 30,000

Explanation / Answer

Cash flow Statement: Cashfows from Operating activities: Net income for the year 26800 Adjustment required to reconcile Gain on sale of equipment -2000 Amortization on copyright(49800-45800) 4000 Depreciation (24800-14140-35200) 24540 Increase in Accounts receivable -10500 Decrease in Inventory 20100 Increase in Prepaid rent -1000 Increase in Accounts payable 6000 Decrease in Income tax payable -1900 Increase in Salaries payable 4000 Net cash provided from Operating activities 70040 Cashflows from Investing activities: Sale of equipment (20200-14140+2000) 8060 Equipment purchased (129900-20200-155200) -45500 Purchase of Short term Investment -16900 Net cash used in investing activities -54340 Cash flows from Financing activities: Repayment of short term loans -1900 Repayment of long term loans -8800 Dividend paid (36300+26800-57100) -6000 Net cash used in Financing activities -16700 Net cash decrease -1000 Add: Beginning balance of cash 7100 Ending balance of cash 6100

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