*Exercise 5-17 Ivanhoe Corporation\'s balance sheet at the end of 2016 included
ID: 2547217 • Letter: #
Question
*Exercise 5-17 Ivanhoe Corporation's balance sheet at the end of 2016 included the following items. Current assets (Cash $82,000) $236,600 Current liabilities $151,600 Land Buildings Equipment Accum. depr.-buildings Accum. depr.-equipment Patents 32,700 Bonds payable 121,600 Common stock 101,600 182,700 92,700 Retained earnings 46,700 (31,600) Total (11,000 ) 41,600 $482,600 Total $482,600 The following information is available for 2017. 1. Net income was $59,140 2. Equipment (cost $21,600 and accumulated depreciation $9,600) was sold for $11,600 3. Depreciation expense was $5,600 on the building and $10,600 on equipment. 4. Patent amortization was $2,500 5. Current assets other than cash increased by $29,000. Current liabilities increased by $14,600 6. An addition to the building was completed at a cost of $28,600 7. A long-term investment (Equity) in stock was purchased for $16,000. 8. Bonds payable of $52,700 were issued 9. Cash dividends of $30,000 were declared and paid 10. Treasury stock was purchased at a cost of $11,000.Explanation / Answer
IVANHOE CORPORATION Statement of Cash Flows For the Year Ended December 31, 2017 Cash Flows from Operating Activities Net income 59140 Adjustments to reconcile net income to net cash provided by operations: Depreciation expense (5600 + 10600) 16200 Amortization expense 2500 Loss on sale of equipment 400 Increase in current assets -29000 Increase in current liabilities 14600 4700 Net cash provided by operating activities 63840 Cash Flows from Investing Activities Proceeds from sale of equipment 11600 Addition to building -28600 Purchase of long-term investment (equity) -16000 Net cash used by investing activities -33000 Cash Flows from Financing Activities Issuance of bonds payable 52700 Purchase of treasury stock -11000 Payment of cash dividends -30000 Net cash provided by financing activities 11700 Net increase (decrease) in cash 42540 IVANHOE CORPORATION Balance Sheet December 31, 2017 Assets Current Assets (Cash $124540) 308140 Long-term investments 16000 Property, plant, and equipment: Land 32700 Buildings 150200 Less: Accum. Depr.-buildings -37200 113000 Equipment 71100 Less: Accum. Depr.-equipment -12000 59100 Total property, plant, and equipment 204800 Intangible assets: Patents 39100 Total assets 568040 Liabilities and Stockholders' Equity Total current liabilities (151600+14600) 166200 Long-term liabilities: Bonds payable (101600 + 52700) 154300 Total liabilities 320500 Stockholders' Equity: Common stock 182700 Retained earnings (46700+59140-30000) 75840 Total paid-in capital and retained earnings 258540 Less: Treasury stock -11000 Total stockholders' equity 247540 Total liabilities and stockholders' equity 568040
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