PLASMA SCREENS CORPORATION Balance Sheets December 31, 2015 and 2014 2015 2014 A
ID: 2475489 • Letter: P
Question
PLASMA SCREENS CORPORATION
Balance Sheets
December 31, 2015 and 2014 2015 2014 Assets: Current assets: Cash $ 108,900 $ 126,800 Accounts receivable 82,000 97,000 Inventory 105,000 89,000 Prepaid rent 6,000 3,000 Long-term assets: Land 530,000 530,000 Equipment 830,000 720,000 Accumulated depreciation (438,000) (288,000) Total assets $ 1,223,900 $ 1,277,800 Liabilities and Stockholders' Equity: Current liabilities: Accounts payable $ 109,000 $ 94,000 Interest payable 6,900 13,800 Income tax payable 10,000 6,000 Long-term liabilities: Notes payable 115,000 230,000 Stockholders' equity: Common stock 750,000 750,000 Retained earnings 233,000 184,000 Total liabilities and stockholders' equity $ 1,223,900 $ 1,277,800 Additional Information for 2015: 1. Net income is $79,000. 2. The company purchases $110,000 in equipment. 3. Depreciation expense is $150,000. 4. The company repays $115,000 in notes payable. 5. The company declares and pays a cash dividend of $30,000.
PLASMA SCREENS CORPORATION Statement of Cash Flows For the Year Ended December 31, 2015 Cash flows from operating activities: Adjustments to reconcile net income to net cash flows from operating activities Net cash flows from operating activities $0 Cash flows from Investing activities: Net cash flows from investing activities 0 Cash flows from financing activities: Net cash flows from financing activities 0 Cash at the beginning of the period Cash at the end of the period $0
Explanation / Answer
PLASMA SCREEN CORPORATION Cash Flow Statement (Indirect Method) For the year ended December 31, 2015 Cash flows from operating activities Net Income $ 79,000 Adjustments for: Depreciation and Amortaization $ 1,50,000 $ 1,50,000 Decrease in Trade Receiveble $ 15,000 Increase in Inventory $ -16,000 Increase in Prepaid Expenses $ -3,000 Increase in Accounts Payable $ 15,000 Decrease in interest payable $ -6,900 Increase in income tax payable $ 4,000 $ 8,100 Cash Generated from Operations $ 2,37,100 Cash flows from investing activities Purchase of property, plant, and equipment $ -1,10,000 Net cash used in investing activities $ -1,10,000 Cash flows from financing activities Notes repaid $ -1,15,000 Dividends Paid $ -30,000 Net cash used in financing activities $ -1,45,000 Net increase in cash and cash equivalents $ -17,900 Cash and cash equivalents at beginning of period $ 1,26,800 Cash and cash equivalents at end of period $ 1,08,900
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