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Below is the comparative balance sheet for Crane Corporation. Dec. 31, 2017 Dec.

ID: 2515621 • Letter: B

Question

Below is the comparative balance sheet for Crane Corporation.

Dec. 31, 2017

Dec. 31, 2016

$16,500

$20,800

25,000

18,900

43,200

44,600

(1,800

(1,900

4,100

2,500

81,700

65,500

49,500

49,500

125,000

73,100

(30,000

(22,800

52,800

46,200

(19,100

(15,500

39,400

39,400

(22,000

(20,500

14,900

–0–

$379,200

$299,800

$26,000

$16,200

3,900

6,100

3,000

4,600

72,900

53,100

49,500

62,400

138,700

102,600

10,100

4,000

75,100

50,800

$379,200

$299,800


Dividends in the amount of $15,000 were declared and paid in 2017.

From this information, prepare a worksheet for a statement of cash flows. Make reasonable assumptions as appropriate. The short-term investments are considered available-for-sale and no unrealized gains or losses have occurred on these securities.

Dec. 31, 2017

Dec. 31, 2016

Cash

$16,500

$20,800

Short-term investments

25,000

18,900

Accounts receivable

43,200

44,600

Allowance for doubtful accounts

(1,800

)

(1,900

) Prepaid expenses

4,100

2,500

Inventory

81,700

65,500

Land

49,500

49,500

Buildings

125,000

73,100

Accumulated depreciation—buildings

(30,000

)

(22,800

) Equipment

52,800

46,200

Accumulated depreciation—equipment

(19,100

)

(15,500

) Delivery equipment

39,400

39,400

Accumulated depreciation—delivery equipment

(22,000

)

(20,500

) Patents

14,900

–0–

$379,200

$299,800

Accounts payable

$26,000

$16,200

Short-term notes payable (trade)

3,900

6,100

Accrued payables

3,000

4,600

Mortgage payable

72,900

53,100

Bonds payable

49,500

62,400

Common stock

138,700

102,600

Paid-in capital in excess of par

10,100

4,000

Retained earnings

75,100

50,800

$379,200

$299,800

Explanation / Answer

Crane Corporation Cash Flow Statement   For the year ended December 31, 2017 Cash flows from operating activities Net Income $   39,300 75100-50800+15000 Adjustment to reconcile net income to: Depreciation expense $   12,300 30000-22800+19100-15500+22000-20500 Decrease in accounts receivable $      1,300 44600-43200-1900+1800 Increase in inventory $ (16,200) 65500-81700 Increase in prepaid expenses $   (1,600) 2500-4100 Increase in accounts payable $      9,800 26000-16200 Decrease in accrued payable $   (1,600) 28000-25000 $      4,000 Net cash flow from operating activities $   43,300 Cash flows from investing activities Cash paid for acqistion of short term investments $   (6,100) 18900-25000 Cash paid for Purchase of building $ (51,900) 73100-125000 Cash paid for Purchase of equipment $   (6,600) 46200-52800 Cash paid for acquistion of patent $ (14,900) Net cash used for investing activities $ (79,500) Cash flows from financing activities Cash received from issuance of common stock $   42,200 138700-102600+10100-4000 Cash paid for dividend $ (15,000) Repayment of short term notes $   (2,200) 3900-6100 Cash from mortgage borrowings $   19,800 72900-53100 Repayment of bonds $ (12,900) 49500-62400 Net cash flow from financing activities $   31,900 Net increase in cash and cash equivalents $   (4,300) Cash and cash equivalents at beginning of period $   20,800 Cash and cash equivalents at end of period $   16,500

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