Current Year Prior Year Balance sheet at December 31 Cash Accounts receivable Me

Question

Current Year Prior Year Balance sheet at December 31 Cash Accounts receivable Merchandise inventory Property and equipment Less: Accumulated depreciation $ 73,250 15,250 23,450 209,250 (57 450) $263,750 $ 16,500 2,000 56,300 103,950 85,000 $ 63,500 21,350 18,000 160,350 Accounts payable Wages payable Note payable, long-term Contributed capital Retained earnings $217,450 $ 19,000 2,700 71,000 65,900 58,850 $263,750 $217 450 Income statement for current year Sales Cost of goods sold Depreciation expense Other expenses Net income $205,000 123,500 11,700 43,000 26,800 Additional Data: a. Bought equipment for cash, $48,900. b. Paid $14,700 on the long-term note payable c. Issued new shares of stock for $38,050 cash. d. Dividends of $650 were declared and paid e. Other expenses all relate to wages f. Accounts payable includes only inventory purchases made on credit

Explanation / Answer

SHARP SCREEN FILMS, INC. Statement of Cash Flows For the Year Ended December 31 Cash flows from operating activities: Net income 26800 Adjustments to reconcile net income to net cash provided by operating activities: Depreciation expense 11700 Decrease in accounts receivable 6100 Increase in merchandise inventory -5450 Decrease in accounts payable -2500 Decrease in wages payable -700 9150 Net cash provided by operating activities 35950 Cash flows from investing activities: Cash payments to purchase fixed assets -48900 Net cash used in investing activities -48900 Cash flows from financing activities: Cash payments on long-term note -14700 Cash payments for dividends -650 Cash receipts from issuing stock 38050 Net cash provided by financing activities 22700 Net increase in cash during the year 9750 Cash balance, January 1 63500 Cash balance, December 31 73250

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