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Sweet Inc., a greeting card company, had the following statements prepared as of

ID: 2519178 • Letter: S

Question

Sweet Inc., a greeting card company, had the following statements prepared as of December 31, 2017.

SWEET INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

12/31/17

12/31/16

$5,900

$7,000

61,500

51,400

35,400

17,800

39,900

60,400

4,900

3,900

155,300

131,000

(34,700

(25,200

45,900

49,900

$314,100

$296,200

$46,500

$39,600

4,100

5,900

8,100

4,100

8,000

9,900

60,600

68,600

100,000

100,000

30,000

30,000

56,800

38,100

$314,100

$296,200

SWEET INC.
INCOME STATEMENT
FOR THE YEAR ENDING DECEMBER 31, 2017

$335,275

173,900

161,375

121,000

40,375

$11,500

2,000

9,500

30,875

6,175

$24,700


Additional information:


Prepare a statement of cash flows using the direct method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

SWEET INC.
COMPARATIVE BALANCE SHEET
AS OF DECEMBER 31, 2017 AND 2016

12/31/17

12/31/16

Cash

$5,900

$7,000

Accounts receivable

61,500

51,400

Short-term debt investments (available-for-sale)

35,400

17,800

Inventory

39,900

60,400

Prepaid rent

4,900

3,900

Equipment

155,300

131,000

Accumulated depreciation—equipment

(34,700

)

(25,200

) Copyrights

45,900

49,900

Total assets

$314,100

$296,200

Accounts payable

$46,500

$39,600

Income taxes payable

4,100

5,900

Salaries and wages payable

8,100

4,100

Short-term loans payable

8,000

9,900

Long-term loans payable

60,600

68,600

Common stock, $10 par

100,000

100,000

Contributed capital, common stock

30,000

30,000

Retained earnings

56,800

38,100

Total liabilities & stockholders’ equity

$314,100

$296,200

Explanation / Answer

Sweet inc. Cash Flow Statement For the year 31 Dec 2017 Statement of Cash flows Cash flows from operating activities Collection from Customers $325,175 Payment of Accounts Payable -$146,500 Payment of opearting expenses -$90,570 Payment of Income Tax (6175+(5900-4100)) -$7,975 Payment of Interest Expenses -$11,500 Net cash from operating activities $68,630 Cash flows from investing activities Sale of Equipment (19900*30%)+2000 $7,970 Purcahse of equipment (155300-(131000-19900) -$44,200 Purchase of Investments -$17,600 Net cash from investing activities -$53,830 Cash flows from financing activities Repayment of Long Term Note payable -$8,000 Repayment of Short Term Note payable -$1,900 Payment of cash Dividend -$6,000 Net cash used in financing activities -$15,900 Net Increase in cash and cash equivalents -$1,100 Cash and cash equivalents at beginning of period $7,000 Cash and cash equivalents at end of period $5,900 Working note 1. Collection from Customers $325,175 Net sales-Increase in Accounts Receivable 335275-(61500-51400) 2. Payment to suppliers $146,500 COGS-Decraese in Inventory-Increase in accounts payable 173900-(60400-39900)-(46500-39600) 3. Payment of opearting expenses $90,570 Operating expenses+ Increase in Salary and wages +Increase in prepaid-Depreciation 121000-4000+1000-23430**-4000*** **Depreciation= (34700-(25200-(70%*19900))=23430 ***Amortization of Copyright=(49900-45900)=4000