Exercise 5-15 2017 2016 Exercise 5-15 Presented below is a condensed version of

Question

Exercise 5-15

2017

2016

Exercise 5-15

Presented below is a condensed version of the comparative balance sheets for Sheffield Corporation for the last two years at December 31.

2017

2016

Cash $ 212,400 $ 93,600 Accounts receivable 216,000 222,000 Investments 62,400 88,800 Equipment 357,600 288,000 Accumulated Depreciation-Equipment (127,200 ) (106,800 ) Current liabilities 160,800 181,200 Common stock 192,000 192,000 Retained earnings 368,400 212,400
Additional information:

Investments were sold at a loss of $12,000; no equipment was sold; cash dividends paid were $36,000; and net income was $192,000.

Explanation / Answer

Statement of cash flow :

Cash flow from operating activities Net income 192000 Adjustment to reconcile net income Depreciation expense 20400 Loss on sale of investment 12000 Decrease account receivable 6000 Decrease current liabilities -20400 18000 Net cash flow from operating activities 210000 Cash flow from investing activities Sale of investment (26400-12000) 14400 Purchase of equipment -69600 Net cash flow from investing activities -55200 Cash flow from financing activities Dividend paid -36000 Net cash flow from financing activities -36000 Net cash flow 118800 Beginning cash 93600 Ending cash 212400

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