urgent need it an hour wil rate The comparative balance sheets of Posner Company
ID: 2411800 • Letter: U
Question
urgent need it an hour wil rate
The comparative balance sheets of Posner Company, for Years 1 and 2 ended December 31, appear below in condensed form.
1
Year 2
Year 1
2
Cash
$53,000.00
$50,000.00
3
Accounts Receivable (net)
37,000.00
48,000.00
4
Inventories
108,500.00
100,000.00
5
Investments
70,000.00
6
Equipment
573,200.00
450,000.00
7
Accumulated Depreciation-Equipment
(142,000.00)
(176,000.00)
8
$629,700.00
$542,000.00
9
Accounts Payable
$62,500.00
$43,800.00
10
Bonds Payable, Due Year 2
100,000.00
11
Common Stock, $10 par
325,000.00
285,000.00
12
Paid-In Capital in Excess of Par—Common Stock
80,000.00
55,000.00
13
Retained Earnings
162,200.00
58,200.00
14
$629,700.00
$542,000.00
The income statement for the current year is as follows:
1
Sales
$625,700.00
2
Cost of merchandise sold
340,000.00
3
Gross profit
$285,700.00
4
Operating expenses:
5
Depreciation expense
$26,000.00
6
Other operating expenses
68,000.00
94,000.00
7
Income from operations
$191,700.00
8
Other revenue and expense:
9
Gain on sale of investment
$4,000.00
10
Interest expense
(6,000.00)
(2,000.00)
11
Income before income tax
$189,700.00
12
Income tax
60,700.00
13
Net income
$129,000.00
Additional data for the current year are as follows:
Required:
Labels and Amount Descriptions
Statement of Cash Flows
Prepare a statement of cash flows using the indirect method of reporting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments.
Posner Company
Statement of Cash Flows
1
Cash flows from operating activities:
2
3
Adjustments to reconcile net income to net cash flow from operating activities:
4
5
6
Changes in current operating assets and liabilities:
7
8
9
10
11
Cash flows from investing activities:
12
13
14
15
Cash flows from financing activities:
16
17
18
19
20
21
Cash at the beginning of the year
22
Cash at the end of the year
1
Year 2
Year 1
2
Cash
$53,000.00
$50,000.00
3
Accounts Receivable (net)
37,000.00
48,000.00
4
Inventories
108,500.00
100,000.00
5
Investments
70,000.00
6
Equipment
573,200.00
450,000.00
7
Accumulated Depreciation-Equipment
(142,000.00)
(176,000.00)
8
$629,700.00
$542,000.00
9
Accounts Payable
$62,500.00
$43,800.00
10
Bonds Payable, Due Year 2
100,000.00
11
Common Stock, $10 par
325,000.00
285,000.00
12
Paid-In Capital in Excess of Par—Common Stock
80,000.00
55,000.00
13
Retained Earnings
162,200.00
58,200.00
14
$629,700.00
$542,000.00
Explanation / Answer
Posner Company Statement of Cash Flows Cash flows from operating activities Net Income $ 129,000 Adjustments to reconcile net income to : Depreciation expense $ 26,000 Gain on sale of investment $ (4,000) Decrease in accounts receivable $ 11,000 48000-37000 Increase in inventory $ (8,500) 100000-108500 Increase in accounts payable $ 18,700 62500-43800 $ 43,200 Net cash provided by operating activities $ 172,200 Cash flows from investing activities Cash from sale of investments $ 74,000 70000+4000 Cash paid for purchase of equipment $ (183,200) Net cash used by investing activities $ (109,200) Cash flows from financing activities Cash paid for dividends $ (25,000) Cash paid for retire bonds payable $ (100,000) Cash from sale of common stock $ 65,000 13*5000 Net cash used by financing activities $ (60,000) Net Increase in cash and cash equivalents $ 3,000 Cash and cash equivalents at beginning of period $ 50,000 Cash and cash equivalents at end of period $ 53,000
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