Spreadsheet and Statement of Cash Flows The following information was taken from
ID: 2518292 • Letter: S
Question
Spreadsheet and Statement of Cash Flows
The following information was taken from Lamberson Company's accounting records:
Additional information for the year:
Dividends declared and paid totaled $700.
On January 1, 2016, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion.
Long-term nonmarketable investments that cost $1,600 were sold for $2,300.
The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year.
Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets.
Equipment was purchased at a cost of $16,200.
The 12% bonds payable were issued on August 31, 2016, at 97. They mature on August 31, 2026. The company uses the straight-line method to amortize the discount.
Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable.
Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.
Required
Prepare a spreadsheet to support Lamberson Company's 2016 statement of cash flows. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.
LAMBERSON COMPANY
Cash Flows Worksheet
For Year Ended December 31, 2016
2016 December 31,
2016 Debits Cash $ 1,400 $ 2,400 Accounts Receivable (net) 2,800 2,690 Marketable Securities (at cost) 1,700 3,000 Allowance for Change in Value 500 800 Inventories 8,100 7,910 Prepaid Items 1,300 1,710 Investments (long-term) 7,000 5,400 Land 15,000 15,000 Buildings and Equipment 32,000 46,200 Discount on Bonds Payable — 290 $69,800 $85,400 Credits Accumulated Depreciation $16,000 $16,400 Accounts Payable 3,800 4,150 Income Taxes Payable 2,400 2,504 Wages Payable 1,100 650 Interest Payable — 400 Note Payable (long-term) 3,500 — 12% Bonds Payable — 10,000 Deferred Taxes Payable 800 1,196 Convertible Preferred Stock, $100 par 9,000 — Common Stock, $10 par 14,000 21,500 Additional Paid-in Capital 8,700 13,700 Unrealized Increase in Value of Marketable Securities 500 800 Retained Earnings 10,000 14,100 $69,800 $85,400
Explanation / Answer
LAMBERSON COMPANY'S STATEMENT OF CASH FLOWS FOR THE YEAR ENDED December 31, 2016 Detail Debit (in $) Credit (in $) Cash Flow from Operating activities:- Net Income $4,800 Add: Depreciation Expense $2,100 Decrease in Account Receivable $110 Decrease in Inventory $190 Increase in Account Payable $350 Increase in income Tax Payable $104 Increase in interest Payable $400 Loss on Sale of Equipment $200 Increae in Deferred Tax Payable $396 Bond Discount Premium $10 Less: Increase in Prepaid items $410 Decrease in Wages Payable $450 Gain on Sale of Investment $700 Cash flow from investing activities Payment for Purchase of Short term Marketable Securities $1,300 Proceed from Sale of Long term investment $2,300 Proceed from Sale of Equipment $100 Payment for Purchase of Equipment $16,200 Cash from Finance Activities Payment of Dividend $700 Proceed from Issuance of 12% bond $9,700 Investing and Financing Activities Not Affecting Cash Issuance of Common Stock to Convert Preferred Stock $9,000 Conversion of Preferred Stock to Common Stock $9,000 Issuance of Common Stock to pay Long Term note $3,500 Payment of Long term Note by issuing Common Stock $3,500 Net Increase in Cash (Bal Fig) $1,000 Closing Balance of Cash $33,260 $33,260
Related Questions
drjack9650@gmail.com
Navigate
Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.