Blaylock Company provided the following partial comparative balance sheets and t

Question

Blaylock Company provided the following partial comparative balance sheets and the income statement for 2016.

Blaylock Company

Comparative Balance Sheets

At December 31, 2015 and 2016

1

2015

2016

2

Current assets:

3

Accounts receivable

$750,000.00

$582,500.00

4

Inventories

300,000.00

320,000.00

5

Long-term assets:

6

Plant and equipment

2,200,000.00

2,150,000.00

7

Accumulated depreciation

(1,200,000.00)

(1,270,000.00)

8

Land

1,000,000.00

1,437,500.00

9

Current liabilities:

10

Wages payable

$700,000.00

$515,000.00

11

Long-term liabilities:

12

Bonds payable

0.00

385,000.00

13

Mortgage payable

100,000.00

0.00

14

Common stock

375,000.00

375,000.00

15

Paid-in capital in excess of par

280,000.00

280,000.00

16

Retained earnings

1,825,000.00

2,325,000.00

Blaylock Company

Income Statement

For the Year Ended December 31, 2016

1

Revenues

$3,000,000.00

2

Gain on sale of equipment

100,000.00

3

Less: Cost of goods sold

(1,920,000.00)

4

Less: Depreciation expense

(270,000.00)

5

Less: Interest expense

(10,000.00)

6

Net income

$900,000.00

Blaylock Company

Comparative Balance Sheets

At December 31, 2015 and 2016

Explanation / Answer

Statement of Cash flow

First calcuate the cash position in both years 2015 2016 2 Current assets: 3 Accounts receivable           750,000           582,500 4 Inventories           300,000           320,000 5 Long-term assets: 6 Plant and equipment        2,200,000        2,150,000 7 Accumulated depreciation       (1,200,000)       (1,270,000) 8 Land        1,000,000        1,437,500 Cash and Bank (Balancing figure)           230,000           660,000        3,280,000        3,880,000 9 Current liabilities: 10 Wages payable           700,000           515,000 11 Long-term liabilities: 12 Bonds payable                     -             385,000 13 Mortgage payable           100,000                     -   14 Common stock           375,000           375,000 15 Paid-in capital in excess of par           280,000           280,000 16 Retained earnings        1,825,000        2,325,000       3,280,000       3,880,000

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