During 2015, the following events occurred: Lander liquidated its available-for-

Question

During 2015, the following events occurred: Lander liquidated its available-for-sale investment portfolio at a loss of $6,500. A tract of land was purchased for $31,000. An additional $20,000 in common stock was issued at par. Dividends totaling $5,000 were declared and paid to stockholders. Net income for 2015 was $29,000, including $7,000 in depreciation expense. Land was purchased through the issuance of $25,000 in additional bonds. At December 31, 2015, cash was $72,650, accounts receivable was $35,250, and accounts payable was $32,500. In an Excel Spreadsheet: prepare a statement of cash flows for the year 2015 for Lander. Prepare the balance sheet as it would appear as of December 31,2015.

Explanation / Answer

During 2015, the following events occurred:

Lander liquidated its available-for-sale investment portfolio at a loss of $6,500.

A tract of land was purchased for $31,000.

An additional $20,000 in common stock was issued at par.

Dividends totalling $5,000 were declared and paid to stockholders.

Net income for 2015 was $29,000, including $7,000 in depreciation expense.

Land was purchased through the issuance of $25,000 in additional bonds.

At December 31, 2015, cash was $72,650, accounts receivable was $35,250, and accounts payable was $32,500.

In an Excel spreadsheet:

Prepare a statement of cash flows for the year 2015 for Lander.

Bonds payable = $35000 + $25000

Common stock = $190,000+$20,000

Retained earnings = $18,400 - 5000 + 29000

Lander Inc. had the following balance sheet at December 31, 2014: LANDER, INC. Balance Sheet 31-Dec-14 Cash $45,300 Accounts payable $33,800 Accounts receivable $18,900 Bonds payable $35,000 Investments $25,000 Common stock $190,000 Plant assets (net) $78,000 Retained earnings $18,400 Land $110,000 Total Assets $277,200 Total Liabilities & Equity $277,200

During 2015, the following events occurred:

Lander liquidated its available-for-sale investment portfolio at a loss of $6,500.

A tract of land was purchased for $31,000.

An additional $20,000 in common stock was issued at par.

Dividends totalling $5,000 were declared and paid to stockholders.

Net income for 2015 was $29,000, including $7,000 in depreciation expense.

Land was purchased through the issuance of $25,000 in additional bonds.

At December 31, 2015, cash was $72,650, accounts receivable was $35,250, and accounts payable was $32,500.

In an Excel spreadsheet:

Prepare a statement of cash flows for the year 2015 for Lander.

a. LANDER, INC. STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DECEMBER 31, 2009 Cash flows from operating expenses Net Income $29,000 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Expenses $7,000 Loss on sale of investments $6,500 Decrease in accounts payable ($33,800 - $32,500) ($1,300) Increase in accounts receivable ($35,250 - $18,900) ($16,350) ($4,150) Net cash provided by operating activities $24,850 Cash flows from investing activities Sale of investments ($25,000 - $6,500) $18,500 Purchase of land ($31,000) Net cash used by investing activities ($12,500) Cash flows from financing activities Issuance of common stock $20,000 Payment of cash dividends ($5,000) Net cash used by financing activities $15,000 Net increase in cash $27,350 Cash at beginning of year $45,300 Cash at end of year $72,650 b.) LANDER, INC. Balance Sheet 31-Dec-15 Cash $72,650 Accounts payable $32,500 Accounts receivable $35,250

Bonds payable = $35000 + $25000

$60,000 Investments $24,000

Common stock = $190,000+$20,000

$210,000 Plant assets (net) $72,000

Retained earnings = $18,400 - 5000 + 29000

$42,400 Land ($110,000 + $31,000) $141,000 Total Assets $344,900 Total Liabilities & Equity $344,900

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