Exercise 23-10 Following are selected balance sheet accounts of Sarasota Bros. C

Question

Exercise 23-10

Following are selected balance sheet accounts of Sarasota Bros. Corp. at December 31, 2017 and 2016, and the increases or decreases in each account from 2016 to 2017. Also presented is selected income statement information for the year ended December 31, 2017, and additional information.

2017

2016

Increase
(Decrease)

2017

2016

Increase

Additional information:

Determine the category (operating, investing, or financing) and the amount that should be reported in the statement of cash flows for the following items.

Activity

$

Selected balance sheet accounts Assets

2017

2016

Increase
(Decrease)

Accounts receivable $34,100 $23,900 $10,200 Property, plant, and equipment 276,600 247,300 29,300 Accumulated depreciation—plant assets (179,700 ) (165,400 ) (14,300 ) Liabilities and stockholders’ equity

2017

2016

Increase

Bonds payable $ 48,800 $46,200 $2,600 Dividends payable 7,900 4,900 3,000 Common stock, $1 par 21,800 19,000 2,800 Additional paid-in capital 8,900 2,900 6,000 Retained earnings 103,500 90,400 13,100 Selected income statement information for the year ended December 31, 2017: Sales revenue $156,600 Depreciation 38,300 Gain on sale of equipment 14,700 Net income 31,000

Explanation / Answer

PROPERTY PLANT AND EQUIPMENT ACCOUNT

No cash dividends have been paid as the dividends payable have increased over the period.

Bonds have only been issued, they have not been redeemed.

S NO. TRANSACTION ACTIVITY AMOUNT ($) (a) Payments for purchase of property, plant and equipment Investing (88,500) (b) Proceeds from the sale of equipment Investing 59,200 (c) Cash dividends paid Financing NIL (d) Redemption of bonds payable Financing NIL

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