Silverman Corporation Compa rative Balance Sheet ASSETS 2017 2016 Cash Accounts

Question

Silverman Corporation Compa rative Balance Sheet ASSETS 2017 2016 Cash Accounts Receivable (net) Pre-paid Insurance Land Equipment Accumulated Depreciation 37,000 80,000 22,000 18,000 70,000 20,000 207,000 31,000 60,000 17,000 40,000 60,000 13,000 195,000 Total Assets Liabilities and Stockholders' Equity Accounts Payable Bonds Payable Common Stock Retained Earnings Total Liabilites and Stockholders Equity 12,000 27,000 140,000 28,000 207,000 6,000 19,000 115,000 55,000 195,000 Additional Information Net loss for 2017 is 12,000. Net Sales for 2017 are 250,000 Cash dividends were declared and paid in 2017. Land was sold for cash at a loss of 2,000. This was the only land transaction during the year Equipment with a cost of 15,000 and accumulated depreciation of 10,000 was sold for 5,000 12,000 of bonds were retired during the year at carrying (book) value Equipment was acquired for common stock, The fair value of the common stock at the time of the exchange was 25,000 Prepare a statement of cash flows for 2017 using the INDIRECT METHOD

Explanation / Answer

Sliverman Corporation Partial Statement of Cash Flows For the 3 months Ended December 31, 2017 Cash flows from operating activities Net Income (loss) $ (12,000) Adjustments to reconcile net income to : Depreciation expenses $   17,000 20000-13000+10000 Loss on sale of Land $      2,000 Increase in accounts receivable $ (20,000) 60000-80000 Increase in prepaid insurance $   (5,000) 17000-22000 Increase in accounts payable $      6,000 12000-6000 Net cash flow from operating activities $ (12,000) Cash flows from investing activities Proceeds from Sale of land $   20,000 40000-18000-2000 Proceeds from Sale of equipment $      5,000 Net cash provided by investing activities $   25,000 Cash flows from financing activities Cash paid for retire bonds $ (12,000) Proceeds from issue of bonds $   20,000 27000-19000+12000 Cash paid for dividends $ (15,000) 28000-55000+12000 Net cash used by financing activities $   (7,000) Net Decrease in cash and cash equivalents $      6,000 Cash and cash equivalents at beginning of period $   31,000 Cash and cash equivalents at end of period $   37,000 Non cash investing and financing activities Issued common stock for equipment $   25,000

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