PROBLEM 4 (15 points) A comparative balance sheet for Bemard Company appears bel

Question

PROBLEM 4 (15 points) A comparative balance sheet for Bemard Company appears below BERNARD COMPANY Comparative Balance Sheet Dec. 31,2017 De 31.2016 Assets Cash Accounts receivable Inventory Land Equipment Accumulated depreciation-equipment $113,000 85,000 172,000 72,000 220,000 (66,000) $596,000 $60,000 76,000 193,000 100,000 200,000 (32,000) $597000 Total assets Accounts payable Bonds payable Common stock Retained earnings Liabilities and Stockholders'Equity $ 31,000 100,000 300,000 165,000 $596,000 $ 97,000 180,000 240,000 80,000 $597000 Total liabilities and stockholders' equity Additional information 1. Net income for the year ending December 31, 2017 was $170,000 2. Land was sold at cost 3. Additional Equipment was purchased for $80,000 cash. 4. $70,000 Equipment, with a book value of $50,000, was sold for $48,000 during 2017 5. Bonds payable were redeemed for cash $80,000. 6. Cash dividends of $35,000 were declared and paid during the year 7. Several shares of common stock were issued for a $10,000 Equipment. Instructions: Prepare a statement of cash flows for the year ended December 31, 2017. Note: Write clearly and use proper labels [do not abbreviate]

Explanation / Answer

Statement of cash flow :

Cash flow from operating activities Net income 170000 Adjustment to reconcile net income Loss on sale of equipment 2000 Depreciation exp 54000 Increase account receivable (9000) Decrease inventory 21000 Decrease account payable (66000) Net cash flow from operating activities 172000 Cash flow from investing activities Sale of equipment 48000 Land sold 28000 Purchase equipment (80000) Net cash flow from investing activities (4000) Cash flow from financing activities Dividend paid (35000) Bonds redeem (80000) Net cash flow from financing activities (115000) Net cash flow 53000 Beginning cash 60000 Ending cash 113000

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