C ezto.mheducation.com/hm.tpx The University of Ala.... Home- JNJ Apparel P Pand

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C ezto.mheducation.com/hm.tpx The University of Ala.... Home- JNJ Apparel P Pandora Internet R... N Netflix LIKEtoKNOW.it XS Supply Company is developing its annual financial statements at December 31. The statements are complete except for the statement of cash flows. The completed comparative balance sheets and income statement are summarized: Current Year Previous Balance Sheet at December 31 Cash Accounts Receivable Inventory Equipment Accumulated Depreciation-Equipment $ 35,230 $ 30,300 28,700 38,700 131,500107,000 36,400 42.400 (31.400) (25,700) $214,130$179,000 Accounts Payable Salaries and Wages Payable Note Payable (ong-term) Common Stock Retained Earnings $ 37,400$ 27,700 1,300 44,30051,000 73,300 38,60025,700 ,030 92,800 214,130 $179,000 income Statement Sales Revenue Cost of Goods Sold Other Expenses $127,000 73,500 40,600 Net Income S 12,900 Additional Data: a. Bought equipment for cash, $24,500. b. Paid $6,700 on the long-term note payable. c. Issued new shares of stock for $19,500 cash. d. No dividends were declared or paid e. Other expenses included depreciation, $5,700; Salaries and wages, $20,700, taxes, $6,700; utilities, $7,500 f. Accou nts Payable includes only inventory purchases made on credit. Because there are no liability accounts relating to taxes or other expenses, assume that these expenses were fully paid in cash 8

Explanation / Answer

XS Supply Company Statement of Cash Flows For the year ended Dec 31 Cash Flow from operating activities Net Income                 12,900 Adjustment for non cash effects Depreciation                    5,700 Changes in current asets and liabilities Increase in Accounts Receivable                 (7,700) Increase in Inventory                 (3,700) Decrease in salary and wages payable2                     (270) Increase in Accounts payble                    9,700               16,630 Cash flow from investing activities purchase of equipment               (24,500)             (24,500) Cash flow from financing activities repayment of long term notes                 (6,700) Issue of new shares                 19,500               12,800 Net changes in cash and cash equivalents                  4,930 Opening balances of cash and cash equivalents               30,300 closing balance of cash and cash equivalents               35,230

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