The comparative balance sheets for Skysong, Inc. as of December 31 are presented

Question

The comparative balance sheets for Skysong, Inc. as of December 31 are presented below.

The comparative balance sheets for Skysong, Inc. as of December 31 are presented below. Skysong, Inc. Comparative Balance Sheets December 31 2017 2016 Assets Cash Accounts receivable Inventory Prepaid expenses Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Total $85,136 56,340 62,600 72,616 189,615177,784 19,131 26,292 181,540 162,760 250,400 250,400 (75,120) 281,700 194,060 56,340) 938,662 $846,352 (50,080) (43,82 0) Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock, $1 par Retained earnings Total $56,002 45,072 375,600 375,600 250,400 200,320 256,660 225,360 $938,662 $ 846,352 Additional information: 1. 2. 3. 4. 5. 6. Operating expenses include depreciation expense of $ 52,584 Land was sold for cash at book value Cash dividends of $15,024 were paid Net income for 2017 was $46,324 Equipment was purchased for $115,184 cash. In addition, equipment costing $ 27,544 with a book value of $12,520 was sold for $ 10,016 cash. 50,080 shares of $1 par value common stock were issued in exchange for land with a fair value of $ 50,080.

Explanation / Answer

Cash flow Statement: Cash flows from Operating activities: Net income for the year 46324 Adjustment required Depreciation 52584 Loss on sale of equipment 2504 Decrease in Accounts receivbal 10016 Increase in Inventory -11831 Decrease n Prepaid expense 7161 Increase in Accounts payable 10930 Net cash provided from Operating activities 117688 Cash flows from Investing activities: Purchasse of land -18780 Purchase of equipment -115184 Ssale of equipment 10016 Net cash used in Investing activities -123948 Cash flows from Financing activities: Issue of common Stock 50080 Dividend paid -15024 Net cash provided from Financing activities 35056 Net increase in cash 28796 Beginning Balance in cash 56340 Ending balance in cash 85136

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