2. You did not receive full credit for ths que 1000 points The comparative balan

Question

2. You did not receive full credit for ths que 1000 points The comparative balance sheets and income statements for Gypsy Company tollow Balance Sheets As of December 31 Assets 32.500 16,300 2,800 9,800 5000 52,000 Cash Accounts receivable 4.750 11.200 Accumulated depreciation-equipment 17800) (21.800) 28,000 12,000 Land Total assets $103,650 $ 71,100 Liabilties and equity S. 3.750- $ 4.900 Accounts payable (inventory) Long-term debt Common stock Retained earnings 7,800 47,000 25,000 47,100 33,400 5800 Total liabilibes and equity 103,650$ 71,100 Sales revenue Cost of goods sold 5 61,200 (24,500) Gross margin Depreciation expense 36,700 (12,000) Operating income Gain on sale of equipment Loss on disposal of land 24,700 1,500 (100) Net income 5 26,100 Additional Data 1. During 2017, the company sold equipment for $21,500, t had originally cost $36,000 Accumulated depreciation on this equipment was $16.000 at the time of the sale Also, the company purchased equipment for $29,000 cash 2. The company sold land that had cost s6,000 This land was sold for $5,900, resulting in the recognition of a $100 loss. Aiso, common stock was issued in exchange for tee to land that was valued at $22,000 at the time of exchange Paid dividends of $12,400 3 Required Prepare a statement of cash flows using the indrect method (Amounts to be deducted should be indicated with a minus sign

Explanation / Answer

Description Amount Amount Cash flow from operating activity        32,200 Net Income before tax         26,100 Gain on sale of investments         (1,500) Loss on sale of land               100 Add non cash expense Depreciation         12,000 Adjustment for change in working capital Change in AR         (1,950) Change in inventory         (1,400) Change in AP         (1,150) Cash flow from Financing activity     (14,400) Issue of new shares to purchase land                  -   Redemption of bonds         (2,000) Dividends paid      (12,400) Cash flow from Investing activity        (1,600) Sale of Land           5,900 Purchase of equipment      (29,000) Purchase of land by issue of shares                  -   Sale of equipment         21,500 Total of above        16,200 Opening cash balance        16,300 Closing Cash balance        32,500 In BS        32,500 Variance                 -   Equipment Opening gross block         52,000 Less sold      (36,000) Balance         16,000 Closing Gross block         45,000 New purchase- Closing gross block less balance         29,000 Land Opening gross block         12,000 Less sold         (6,000) Balance           6,000 Closing Gross block         28,000 New purchase- Closing gross block less balance         22,000

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