Selected financial statement information and additional data for Ronis Co. is pr
ID: 2336749 • Letter: S
Question
Selected financial statement information and additional data for Ronis Co. is presented below. Use this information to answer the next (3) questions concerning in preparing a statement of cash flows for the year ending December 31, 2017.
2016 2017
Cash........................................................... $60,000 $122,000
Accounts receivable (net)................................ 67,000 100,000
Inventory.................................................... 210,000 198,000
Land........................................................... 350,000 300,000
Equipment................................................... 385,000 405,000
Accumulated depreciation............................... (280,000) (260,000)
TOTAL............................................ $792,000 $865,000
Accounts payable.......................................... 42,000 40,000
Bonds payable - long-term............................... 225,000 260,000
Common stock.............................................. 250,000 250,000
Retained earnings.......................................... 275,000 315,000
TOTAL............................................ $ 792,000 $865,000
Additional data for 2017:
1. Net income was $70,000.
2. Depreciation was recorded for 2017.
3. Land was sold for $65,000 cash, and no land was purchased this year.
4. Equipment with an original cost of $100,000 and book value of $55,000 was sold for a loss of $5,000.
4. Dividends were declared and paid.
5. Equipment was purchased for cash.
6. A long-term bond was issued for cash.
QUESTION:
1) What is the Cash flow from operations?
2) What is the cash flow from investing?
3) What is the cash flow from financing?
please show work!
Explanation / Answer
Ronis Co.
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2017
Gain on sale of land [65000-(350000-300000)]
**Depreciation for year = Accumulated depreciation at end + depreciation on asset sold -Accumulated depreciation at beginning
= 260000+45000-280000
= 25000
Ronis Co.
CASH FLOW STATEMENT
FOR THE YEAR ENDED 31 DECEMBER 2017
Cash flow from operating activity Net Income 70000 Adjustment to reconcile net income to net cash flow from operating activity Depreciation 25000 loss on sale of equipment 5000Gain on sale of land [65000-(350000-300000)]
(15000) Increase in accounts receivable [100000-67000] (33000) Decrease in inventory [210000-198000] 12000 Decrease in accounts payable [42000-40000] (2000) (8000) net cash flow from operating activity 62000 cash flow from investing activity sale of land 65000 sale of equipment [55000-5000loss] 50000 purchase of equipment [385000-100000-405000] (120000) net cash flow from investing activity (5000) net cash flow from financing activity long term debt [260000-225000] 35000 dividend paid [275000 beginning retained earning +70000net income-315000] (30000) net cash flow from financing activity 5000 increase/(decrease in cash during the year [62000-5000+5000] 62000 Beginning cash balance 60000 Cash at end 122000Related Questions
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