lI. The Murdock Corporation reported the following balance sheet data for 2018 a
ID: 2560771 • Letter: L
Question
lI. The Murdock Corporation reported the following balance sheet data for 2018 and 2017 2018 2017 $77,375 $22,955 Cash Available-for-sale debt securities (investment asset, not cash equivalents) Accounts receivable Inventory Prepaid insurance Land, buildings, and equipment Accumulated depreciation Total assets Accounts payable Salaries payable Notes payable (current) Bonds payable Common stock Retained earnings Total liabilities and shareholders' equity 15,500 80,000 165,000 1.500 1.250,000 (610,000) $979 375 $76.340 20,000 25,000 200.000 300.000 358.035 $979.375 85,000 68,250 145,000 2,000 1.125,000 (572,000) $876.205 $148,670 24,500 75,000 300.000 328.035 $876.205Explanation / Answer
Cash Flow Statement Particulars Amount Net Income 50,000 Adjustment For: Depreciation 53,000 Gain on sale of equipment (1,000) Gain on sale of debt securities (4,500) Operating profit before working capital changes 97,500 Adjustment for: Increase in Accounts Receivable (11,750) Increase in Inventory (20,000) Decrease in Prepaid Insurance 500 Decrease in Account Payable (72,330) Decrease in Salary Payable (4,500) Decrease in Notes Payable (50,000) (158,080) Cash generated from operations (60,580) Cash flow from Investing Activities Purcahse of Equipment (145,000) Proceeds from sale of equipment 6,000 Proceeds from sale of debt securities 74,000 Net cash flow from investing activities (65,000) Cash flow from Financing Activities Proceeds from issue of bonds 200,000 Paid dividends (20,000) Net cash flow from financing activities 180,000 Net increase/ (decrease) in cash and cash equivalent during the period 54,420 Cash at beginning 22,955 Cash at the end 77,375
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