PROBLEM4 (15 points) A comparative balance sheet for Lexis Company appears below

Question

PROBLEM4 (15 points) A comparative balance sheet for Lexis Company appears below LEXIS COMPANY Comparative Balance Sheet Des 31 2016 Assets Cash Accounts receivable Land 73,000 87,000 170,000 72,000 250,000 65,000 $22,000 76,000 91,000 100,000 200,000 Accumulated depreciation-equipment Total assets Liabilities and Stockholders Fquity Accounts payable Bonds payable Common stock Retained eamings 37,000 150,000 216,000 $ 47,000 210,000 174,000 Total liabilties and stockholders' equity $596.000 $557,000 1. Net income for the year ending December 31, 2017 was $100,000. 2. Cash dividends of $33,000 were declared and paid during the year 3. Land was sold at cost 4. Bonds payable were redeemed for cash $60,000. 5. Common stock was issued for $42,000 cash 6. Additional Equipment was purchased for $110,000 cash. 7. $50,000 Equipment, with a book value of $30,000, was sold for $36,000 during 2017 Instructions: Prepare a statement of cash flows for the year ended December 31, 2017. Note: Write clearly and use proper labels (do not abbreviate). To gain full credit, you must write down the appropriate levels for each shown amount

Explanation / Answer

Statement of cash flow Cash from operating activities net income for the year 100,000 Adjustments to reconcile net income to net cash provided by operating activities Depreciation expense 54,000 Gain on sale of Equipment -6,000 increase in accounts receivable -11000 decrease in inventory 21000 decrease in accounts payable -10,000 net cash provided by operating activities 148,000 Cash from investing activities cash from sale of land 28,000 cash from sale of equipment 36,000 cash used for purchase of Equipment -110,000 Net cash used by financing activities -46,000 cash from financing activities cash dividends paid -33,000 redemption of bonds -60,000 cash from common stock issue 42,000 net cash used by financing activities -51,000 Net increase in cash 51,000 cash at the beginning of the year 22,000 cash at year end 73,000 Working notes: Depreciation ending balance 66,000 less :dep (32000-20000) 12000 Depreciation expense 54,000 Gain on sale of Equipment cash from sale of Equipment 36,000 less:book value of equipment 30,000 Gain on sale of Equipment 6,000

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