Exercise 23-13 Sweet Inc., a greeting card company, had the following statements
ID: 2520013 • Letter: E
Question
Exercise 23-13
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).)
Explanation / Answer
Sweet Inc.
Statement of Cash Flows
For the Year ended December 31, 2017.
Accounts Receivable :
Inventory:
Accounts Payable :
Cash operating expenses = $ 121,000 - ( Depreciation + Amortization ) = $ 121,000 - $ ( 23,430 + 4,000) = $ 93,570.
$ $ Cash Flows from Operating Activities Cash received from customers 325,175 Cash paid to suppliers (146,500) Cash paid for operating expenses (92,470) Cash Flows before Income Taxes 86,205 Income Taxes Paid (7,975) Cash Flows from Operating Activities 78,230 Cash Flows from Investing Activities Cash received from sale of equipment 7,970 Cash paid for purchase of equipment (44,200) Cash paid for purchase of investments (17,600) Net cash used Investing Activities (53,830) Cash Flows from Financing Activities Cash paid for interest expense (11,500) Cash paid for dividends (6,000) Cash paid to retire long term loans (8,000) Net cash used in Financing Activities (25,500) Net decrease in cash (1,100) Beginning cash balance 7,000 Ending cash balance 5,900Related Questions
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