Use the following information for Problems 15-36 and 15-37: Solpoder Corporation
ID: 2424840 • Letter: U
Question
Use the following information for Problems 15-36 and 15-37:
Solpoder Corporation has the following comparative financial statements:
Solpoder Corporation
Comparative Balance Sheets
At December 31, 2015 and 2016
2015
2016
Assets
Cash
$ 49,500
$ 81,000
Accounts receivable, net
135,000
108,000
Inventory
27,000
54,000
Plant and equipment
180,000
180,000
Accumulated depreciation
(36,000)
(45,000)
Total assets
$355,500
$378,000
Liabilities and equity
Accounts payable
$ 57,600
$ 18,000
Common stock
190,800
207,000
Retained earnings
107,100
153,000
Total liabilities and equity
$355,500
$378,000
Solpoder Corporation
Income Statement
For the Year Ended December 31, 2016
Sales
$ 297,000
Less: Cost of goods sold
(175,500)
Gross margin
$ 121,500
Less: Operating expenses
(58,500)
Net income
$ 63,000
Dividends of $17,100 were paid. No equipment was purchased or retired during the current year.
OBJECTIVE 2
Problem 15-36 Statement of Cash Flows, Indirect Method
Refer to the information for Solpoder Corporation on the previous page.
Required:
Prepare a statement of cash flows using the indirect method.
Solpoder Corporation
Comparative Balance Sheets
At December 31, 2015 and 2016
2015
2016
Assets
Cash
$ 49,500
$ 81,000
Accounts receivable, net
135,000
108,000
Inventory
27,000
54,000
Plant and equipment
180,000
180,000
Accumulated depreciation
(36,000)
(45,000)
Total assets
$355,500
$378,000
Liabilities and equity
Accounts payable
$ 57,600
$ 18,000
Common stock
190,800
207,000
Retained earnings
107,100
153,000
Total liabilities and equity
$355,500
$378,000
Explanation / Answer
Cash Flow Statement
Solpoder Coroporation for the Year Ended December 31 2016
Cash Flow from Operating Activities
Net Income
$63000
Adjustments for:
Depreciation
$9000
Dividend
($17100)
($8100)
Decrease in Trade Receivables
$27000
Increase in Inventories
($27000)
Decrease in Accounts Payables
($39600)
($39600)
Cash Generated from Operations
$15300
Cash from Investing Activities
$0
Cash From Financing Activities
Proceeds From Issue of Common Stock
$16200
Net Cash Used in financing Activities
$16200
Net Increase in Cash and Cash equivalents
$31500
Cash and Cash equivalents at the beginning period
$49500
Cash and Cash equivalents at the end of period
$81000
Cash Flow Statement
Solpoder Coroporation for the Year Ended December 31 2016
Cash Flow from Operating Activities
Net Income
$63000
Adjustments for:
Depreciation
$9000
Dividend
($17100)
($8100)
Decrease in Trade Receivables
$27000
Increase in Inventories
($27000)
Decrease in Accounts Payables
($39600)
($39600)
Cash Generated from Operations
$15300
Cash from Investing Activities
$0
Cash From Financing Activities
Proceeds From Issue of Common Stock
$16200
Net Cash Used in financing Activities
$16200
Net Increase in Cash and Cash equivalents
$31500
Cash and Cash equivalents at the beginning period
$49500
Cash and Cash equivalents at the end of period
$81000
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