Name Western Auto - Statement of Cash Flows Western Auto Balance Sheet 2017 2016
ID: 2595247 • Letter: N
Question
Name Western Auto - Statement of Cash Flows Western Auto Balance Sheet 2017 2016 balance change Assets Acct Receivable Inventory Prepaid Exp Land Equipment Accumulated depreciation -equipment $ 34,500 56,500 22,000 81,000 23,000 10,000 119,000 54,000 15,000 394,000 324,000 (1,000) 37,000 (2,000) 80,000 60,000 8,000 (12,000)107,000 63,000 19,500 9,000 4,500 Total assets.. AP Wages Pay Interest Pay Taxes Pay Notes payable, long term $ (14,000)23,000 $ 37,000 20,000 12,000 6,000 92,000 16,000 2,000 3,000 6,000 36,000 14,000 9,000 98,000 ash Flows from Financing Total liabilities 180,000 167,000 15,000 131,000 116,000 11,000 127,000 294,000 Common Stock Retained earnings 33,000 48,000 44,000 175,000 355,000 Total stockholders' equity et increase in cash ash at the beginning of the year ash at the ending of the year 22,000 Total liabilities and stockholders' equity S 56,500 Notes: $ 38,000 1. Net Income for 2017 was 2. Equipment was sold for $12,000 with original cost of $16,000 resulting in a loss of $2,500. 3. Equipment was purchased for cash. 4. Land was sold for 5. Common stock was issued for cash. 8,100Explanation / Answer
Details
Net
Cash Flow from Operating Activities
Net Profit before tax
(38,000 + 9,000)
47,000
Add: Non Cash and Non Operating Expenses
Depreciation
6,000
Loss on sale of equipment
2,500
Loss on sale of land(12,000-8,100)
3,900
Interest paid
14,000
Operating profit before Working Capital changes
73,400
Add: Increase in Current Liabilities And decrease in Current Assets
Increase in wages payable
16,000
Decrease In Accounts receivable
1,000
Increase in Prepaid expenses
2000
Less: Decrease in Current Liabilities And Increase in Current Assets
Decrease in Accounts Payable
(14,000)
Increase in inventory
(37,000)
Operating profit before income tax
41,400
Taxes paid
(6,000)
Cash Flow from Operating Activities (A)
35,400
Cash Flow from Investing Activities
Sale of equipment
12,000
Purchase of equipment
(25,000)
Sale of Land
8,100
Cash Used in Investing Activities (B)
(4,900)
Cash Flow from Financing Activities
Issue of Shares
15,000
Interest paid
(12,000)
Dividend Paid
(5,000)
Increase in long term loan
6,000
Cash Flow from in Financing Activities ( C )
4,000
Increase in Cash Flow (A+B+C)
34,500
Opening Cash
22,000
Closing Cash
56,500
Equipment A/c
Particulars
In $
Particulars
In $
To Bal. b/d
54,000
By bank
12,000
By accumulated dep.
1,500
To Cash
25,000
By P&L
2,500
By bal. c/d
63,000
Total
79,000
Total
79,000
Acc. Depreciation Equipment A/c
Particulars
In $
Particulars
In $
To equipment
1,500
To Bal. b/d
15,000
By P&L (Current year)
6,000
By bal. c/d
19,500
Total
21,000
Total
21,000
Income Tax A/c
Particulars
In $
Particulars
In $
To Bal. b/d
6,000
To bank(Paid)
6,000
By P&L (Current Year)
9,000
By bal. c/d
9,000
Total
15,000
Total
15,000
Note 1
It is assumed that closing balance of Income tax and Interest are the once which is created this year and opening balance is of Previous year and paid this year
Note 2
It can be seen that there is a profit of 38,000 but retain earnings is increased by 33,000 the remaining 5,000 is must be the DIVIDEND paid in the year
Details
Net
Cash Flow from Operating Activities
Net Profit before tax
(38,000 + 9,000)
47,000
Add: Non Cash and Non Operating Expenses
Depreciation
6,000
Loss on sale of equipment
2,500
Loss on sale of land(12,000-8,100)
3,900
Interest paid
14,000
Operating profit before Working Capital changes
73,400
Add: Increase in Current Liabilities And decrease in Current Assets
Increase in wages payable
16,000
Decrease In Accounts receivable
1,000
Increase in Prepaid expenses
2000
Less: Decrease in Current Liabilities And Increase in Current Assets
Decrease in Accounts Payable
(14,000)
Increase in inventory
(37,000)
Operating profit before income tax
41,400
Taxes paid
(6,000)
Cash Flow from Operating Activities (A)
35,400
Cash Flow from Investing Activities
Sale of equipment
12,000
Purchase of equipment
(25,000)
Sale of Land
8,100
Cash Used in Investing Activities (B)
(4,900)
Cash Flow from Financing Activities
Issue of Shares
15,000
Interest paid
(12,000)
Dividend Paid
(5,000)
Increase in long term loan
6,000
Cash Flow from in Financing Activities ( C )
4,000
Increase in Cash Flow (A+B+C)
34,500
Opening Cash
22,000
Closing Cash
56,500
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