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of the accounting data and additional information you are requested to prepare S

ID: 2592461 • Letter: O

Question

of the accounting data and additional information you are requested to prepare Statement of Cash flow for the year ended 2016 Ques. C3 Following are the comparative balance sheet of Berkler Company. On the basis BERKLER COMPANY Comparative Balance Sheets Assets Cash Accounts receivable Inventory Prepaid expense Land Buildings Accumulated depreciation Equipment Accumulated depreciation 2016 2015 96000 78000 76000 70000 52000 55000 22000 18000 110000 144000 300000 300000 -60000 -50000 264000 210000 -90000 80000 770000 745000 Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock $1 par value Retained earning 26000 35000 350000 400000 170000 120000 224000 190000 770000 745000 Additional information: 1 Operating expenses include depreciation expense of $48,000. 2 Land was sold for cash at book value. 3 Cash dividends of S12,000 were paid. 4 Net income for 2016 was $46,000 Equipment was purchased for $88,000 cash. In addition equipment 5 costing $34000 with a book value of S6000 was sold for $9000 cash. Bonds were convert data face value by issuing 50000 share of 6 $1 par value common stock. (8 marks)

Explanation / Answer

Berkler company Statement of Cash Flows For the year ended December 2016 Amount $ Operating Activities Net Income 46,000 Adjustments: Non-Cash adjustment: Depreciation 48,000 Gain on sale of equipment           -3,000 Due to changes in Working capital Due to changes in accounts receivable (76000-70000) -6,000 Due to changes in Inventories (52000-55000)            3,000 Due to changes in prepaid expenses (22000-18000)           -4,000 Due to changes in accounts payable (26000-35000)           -9,000 Net Cash provided (used) by operating activities          75,000 Investing Activities Cash used to acquire equipment        -88,000 Cash receipts from sale of land (144000-110000)          34,000 Cash receipts from sale of equipment            9,000 Net cash provided (used) by investing activities        -45,000 Financing Activities Due to change in bonds payable (350000-400000)        -50,000 Due to change in common stock          50,000 Payment of common dividends        -12,000 Net cash provided (used) by investing activities)        -12,000 Net increase/decrease in cash          18,000 Add: Cash balance at the begining of the year          78,000 Cash balance at the end of the year          96,000

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