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Simple 10:46 AM ezto.mheducation.com 91% The comparative balance sheets for 2016

ID: 2599704 • Letter: S

Question

Simple 10:46 AM ezto.mheducation.com 91% The comparative balance sheets for 2016 and 2015 and the income statement for 2016 are given below for Arduous Company. Additional information from Arduous's accounting records is provided also ARDUOUS COMPANY Comparative Balance Sheets December 31, 2016 and 2015 (S in millions) 2016 2015 $ 152 $ 99 230 Accounts receivable Investment revenue receivable 208 26 218 31 Prepaid insurance 212 Buildings and equipment (115) (156) $1,462 $1.244 $ 68 101 26 28 30 Accounts payable Salaries payable Bond interest payable Income tax payable Deferred income tax iability Notes payable Lease liabiiry Bonds payable 100 311 (44) Less: Discount on bonds Shareholders Equity Common stock Paid-in capital--excess of par Preferred stock Retained earnings (40) 113 93 Less: Treasury stock $1,462 $1,244 ARDUOUS COMPANY Income Statement For Year Ended December 31, 2016 (S in millions) Revenues and gain: Sales revenue Investment revenue Gain on sale of treasury bills Expenses and loss: Cost of goods sold $582 4 $618

Explanation / Answer

Arduous Company Statement of cash flows For the year ended December 31, 2016 Cash flow from operating activities Net Income 153 Add: depreciation expense 12 Patent Amortization 4 Deferred tax liability 21 A/R Decrease 22 PP Ins Decrease 7 Int/P Increase 6 Disc. Amortization 4 76 Less: Equity Income 26 Reveue Rec. Increase 4 Inventory Increase 8 A/P Decrease 33 Salary/P Decrease 10 Tax/P Decrease 6 87 142 Cash flow from Investing Activities Sale of equipment 18 Purchase long-term investment -43 Purchase land -41 -66 Cash flow from Financing Activities Issued P/S 93 Issued Bonds 78 Purchased treasury stock -27 Paid dividends -23 121 Net Change in cash 197 Add: January 1 Balance 99 December 31 Balance 296

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