Selected financial statement information and additional data for Johnson Co. is
ID: 2379593 • Letter: S
Question
Selected financial statement information and additional data for Johnson Co. is presented below. Prepare a statement of cash flows for the year ending December 31, 2014
December 31
2013
2014
Cash
$42,000
$65,000
Accounts receivable (net)
84,000
144,200
Inventory
168,000
206,600
Land
58,800
21,000
Equipment
504,000
789,600
TOTAL
$856,800
$1,226,400
Accumulated depreciation
$84,000
$115,600
Accounts payable
50,400
86,000
Notes payable - short-term
67,200
29,400
Notes payable - long-term
168,000
302,400
Common stock
420,000
487,200
Retained earnings
67,200
205,800
TOTAL
$856,800
$1,226,400
Additional data for 2014:
1. Net income was $220,200.
2. Depreciation was $31,600.
3. Land was sold at its original cost.
4. Dividends of $81,600 were paid.
5. Equipment was purchased for $84,000 cash.
6. A long-term note for $201,600 was used to pay for an equipment purchase.
7. Common stock was issued to pay a $67,200 long-term note payable.
December 31
2013
2014
Cash
$42,000
$65,000
Accounts receivable (net)
84,000
144,200
Inventory
168,000
206,600
Land
58,800
21,000
Equipment
504,000
789,600
TOTAL
$856,800
$1,226,400
Accumulated depreciation
$84,000
$115,600
Accounts payable
50,400
86,000
Notes payable - short-term
67,200
29,400
Notes payable - long-term
168,000
302,400
Common stock
420,000
487,200
Retained earnings
67,200
205,800
TOTAL
$856,800
$1,226,400
Explanation / Answer
Johnson Co.
Statement of Cash Flows
For the Year Ended December 31, 2014
Cash Flow from Operating Activities
Net Income - 220,200
Adj:
Depreciation Expense - 31,600
Changes in Operating Assets and Liabilities :
Increase in Accounts Receivable(net) - (60,200)
Increase in Inventory - (38,600)
Increase in Accounts Payable - 35,600
Decrease in Notes Payable - Short - (37,800)
Net Cash from Operating Activities - 150800
Cash Flow from Investing Activities
Sale of Land - 37800
Purchase of Equipment - (84000)
Net Cash Flow for Investing Activities - 46200
Cash Flow from Financial Activities
Less:
Cash paid for dividends - 81600
Net Cash Flow for Financial Activities - 81600
Increase in Cash - 23000
Cash balance, January 1, 2014 - 42000
Cash balance, December 31, 2014 - 65000
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