- A Statement Of Cash Flows Indirect Method The Sky Company S Income Statement And Compara Tive Balance Sheets As Of D 1 (75.74 KiB) Viewed 43 times
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continued from previous page Liabilities and Stockholders' Equity Accounts payable.. Interest payable Income tax payable Bonds payable SKY COMPANY Balance Sheets Preferred stock ($100 par value) Common stock ($5 par value) Paid-in-capital in excess of par value-Common.. Retained earnings... Unrealized gain on investments. Total liabilities and stockholders' equity Dec. 31, 2019 $ 21,000 6,000 8,000 135,000 100,000 379,000 133,000 167,000 $949,000 Dec. 31, 2018 a. Calculate the change in cash and cash equivalents that occurred during 2019. b. Prepare a statement of cash flows using the indirect method. $ 18,000 5,000 12,000 130,000 75,000 364,000 124,000 55,000 7,000 $790,000 During the year, the following transactions occurred: 1. Sold long-term investments costing $50,000 for $60,000 cash. Unrealized gains totaling $7,000 related to these investments had been recorded in earlier years. At year-end, the fair value adjust- ment and unrealized gain account balances were eliminated. 2. Purchased land for cash. 3. Capitalized an expenditure made to improve the building. 4. Sold equipment for $14,000 cash that originally cost $46,000 and had $27,000 accumulated depreciation. 5. Issued bonds payable at face value for cash. 6. Acquired a patent with a fair value of $25,000 by issuing 250 shares of preferred stock at par value. 7. Declared and paid a $53,000 cash dividend. 8. Issued 3,000 shares of common stock for cash at $8 per share. 9. Recorded depreciation of $16,000 on buildings and $23,000 on equipment. Required
26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 a. b. P12-4A. Statement of Cash Flows (Indirect Method) (LO2) Cash, December 31, 2019 Cash, December 31, 2018 Cash increase during 2019 Information provided on balance sheet Insert additional lines. as necessary Supporting computations: The adjamants to convert the net income of $165,000 to cash provided by operating activities of $169,000 are shown in the statement of cash flows. Purchase of land Sale of investments: $60,000 given in problem data SSS $ $ $ Example 80,000 (32,000) 48,000
Improvements to building: Sale of equipment Issuance of bonds payable Acquisition of patent in exchange for preferred stock Issuance of common stock Payment of dividends
Payment of dividends Other Analysis - Long term investments available for sale Fair value adjustment to investments Accumulated Depreciation - building - Equipment decreased - Accumulated depreciation for equipment Patents increased Preferred stock increased Insert information from text
Retained earnings increased Unrealized gain on investments decreased Sky Company Statement of Cash Flows For Year Ended December 31, 2019 Cash flow from operating activities Net income Add (deduct) items to convert net income to cash basis Depreciation Patent amortizatrion Loss on sale of equipment Gain on sale of investments Accounts Receivable increase Inventory increase. Given in data set $ 25,000 24,000
ady Sheett Sheet2 Cash flow from operating activities Net income Add (deduct) items to convert net income to cash basis Depreciation Patent amortizatrion Loss on sale of equipment Gain on sale of investments Accounts Receivable increase Inventory increase Prepaid expenses increase Accounts payable increase Interest payable increase Income tax payable decrease Cash provided by operating activities Cash flow from investing activities Sale of investments Purchase of land Improvements to building Sale of equipment Cash used by investing activities Cash flow from financing activities Issuance of bonds payable Sheett Sheets Sheet3 + Given in data set check figure-Cash provided by operating activities $169,000 Check figure - Cash used by investing activities $111,000 $ 25,000 24,000 169,000 S
231 232 233 234 235 236 237 238 239 240 241 242 243 244 245 246 247 248 249 250 Cash now from financing activites Issuance of bonds payable Issuance of common stock Payment of dividends Cash provided by financing activities Net increase in cash Cash at beginning of year Cash at end of year P12-SA. Analyzing Cash Flow Ratios (L03) T Cash provided by financing activities $-24,000 Given in data set, part a. Free Cash Flow Ann Ann Operating Cash Flow to Current Liabilities Ratio 1.01 $ 169,000 Operating Cash Flow to Capital Expenditures ratio 3.0