Exercise 23-21 Below is the comparative balance sheet for Sarasota Corporation.

Question

Exercise 23-21 Below is the comparative balance sheet for Sarasota Corporation. Dec. 31, 2016 Dec. 31, 2017 Cash Short-term investments Accounts receivable Allowance for doubtful accounts Prepaid expenses Inventory Land Buildings Accumulated depreciation buildings Equipment Accumulated depreciation equipment Delivery equipment Accumulated depreciation delivery equipment Patents $16,400 $20,900 24,700 42,600 18,800 44,800 (1,800)(1,900) 4,300 82,000 50,500 125,400 (30,000 ) 53,300 (19,200) 38,700 (22,200 ) 14,800 2,500 65,100 50,500 74,100 (22,900) 45,600 (15,700 ) 38,700 (20,500 ) 0 $379,500 $300,000 Accounts payable Short-term notes payable (trade) Accrued payables Mortgage payable Bonds payable Common stock Paid-in capital in excess of par Retained earnings $26,000 $16,200 6,000 4,500 53,400 62,700 101,400 3,900 51,900 $379,500 $300,000 4,000 3,000 73,300 50,100 140,300 10,000 72,800 Dividends in the amount of $15,000 were declared and paid in 2017.

Explanation / Answer

SARASOTA CORPORATION WORKSHEET FOR PREPARATION OF STATEMENT OF CASH FLOWS For the Year Ended December 31, 2017 2017 Reconciling items Debits Balance at 12/31/16 Debit Credit Balance at 12/31/17 Cash 20900 4500 16400 Short-term investments 18800 5900 24700 Accounts receivable 44800 2200 42600 Prepaid expenses 2500 1800 4300 Inventory 65100 16900 82000 Land 50500 50500 Buildings 74100 51300 125400 Equipment 45600 7700 53300 Delivery equipment 38700 38700 Patents 14800 14800 Total debits 361000 452700 Credits Accounts payable 16200 9800 26000 Notes payable 6000 2000 4000 Accrued liabilities 4500 1500 3000 Allowance for doubtful accounts 1900 100 1800 Accumulated depreciation-building 22900 7100 30000 Accumulated depreciation-equipment 15700 3500 19200 Accumulated depreciation-delivery equipment 20500 1700 22200 Mortgage payable 53400 19900 73300 Bonds payable 62700 12600 50100 Common stock 101400 38900 140300 Paid-in capital in excess 3900 6100 10000 Retained earnings 51900 20900 72800 Total credits 361000 452700 Sarasota Corporation Statement of Cash Flows Effects Cash Flows from Operating Activities Net income 20900 Depreciation expense 12300 Decrease in accounts receivable 2100 Increase in prepaid expenses 1800 Increase in inventory 16900 Increase in accounts payable 9800 Decrease in accrued liabilities 1500 Cash Flows from Investing Activities Purchase of short-term investments 5900 Purchase of buildings 51300 Purchase of equipment 7700 Purchase of patents 14800 Cash Flows from Financing Activities Payment of notes payable 2000 Additional Mortgage payable 19900 Payment to retire bonds payable 12600 Issuance of common stock 45000 Totals 110000 114500 Net Decrease in Cash 4500 Totals 114500 114500

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