Statement of Cash Flows
Your supervisor has provided you with the following statement of cash flows, prepared using the indirect method. Recall that the statement of cash flows consists of three sections: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Review the statement, and then proceed to the next panel.
Championship Boxing, Inc. Statement of Cash Flows For the Year Ended December 31, 20Y8 |
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Cash flows from (used for) operating activities: | ||||
Net income | $186,540 | |||
Adjustments to reconcile net income to net cash flow from operating activities: | ||||
Depreciation | 18,400 | |||
Gain on sale of investments | (50,000) | |||
Changes in current operating assets and liabilities: | ||||
Increase in accounts receivable | (25,410) | |||
Increase in inventories | (33,450) | |||
Increase in accounts payable | 41,130 | |||
Decrease in accrued expenses payable | (12,470) | |||
Net cash flow from operating activities | $124,740 | |||
Cash flows from (used for) investing activities: | ||||
Cash received from sale of investments | $280,000 | |||
Cash paid for purchase of land | (326,000) | |||
Cash paid for purchase of equipment | (151,920) | |||
Net cash flow used for investing activities | (197,920) | |||
Cash flows from (used for) financing activities: | ||||
Cash received from sale of common stock | $187,500 | |||
Cash paid for dividends | (91,200) | |||
Net cash flow from financing activities | 96,300 | |||
Net increase in cash | $23,120 | |||
Cash balance, January 1, 20Y8 | 585,920 | |||
Cash balance, December 31, 20Y8 | $609,040 |
Balance Sheet
Using the information on above, complete the following comparative balance sheet.
Championship Boxing, Inc. Comparative Balance Sheet December 31, 20Y8 and 20Y7 |
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20Y8 | 20Y7 | |||||
Assets | ||||||
Cash | $ | $585,920 | ||||
Accounts receivable (net) | 230,970 | |||||
Inventories | 618,320 | |||||
Investments | 0 | |||||
Land | 0 | |||||
Equipment | 705,120 | |||||
Accumulated depreciation-equipment | (166,400) | |||||
Total assets | $ | $ | ||||
Liabilities | ||||||
Accounts payable (merchandise creditors) | $ | $391,800 | ||||
Accrued expenses payable (operating expenses) | 41,160 | |||||
Dividends payable | 19,200 | |||||
Total liabilities | $498,090 | $ | ||||
Stockholders' Equity | ||||||
Common stock, $4 par | $ | $100,000 | ||||
Paid-in capital in excess of par | 280,000 | |||||
Retained earnings | ||||||
Total stockholders' equity | $1,858,410 | $ | ||||
Total liabilities and stockholders' equity | $ | $ |
Championship Boxing, Inc. | ||
Comparative Balance Sheet | ||
December 31, 20Y8 and 20Y7 | ||
20Y8 | 20Y7 | |
Assets | ||
Cash | $ 6,09,040 | $ 5,85,920 |
Accounts receivable (net) | $ 2,30,970 | $ 2,05,560 |
Inventories | $ 6,51,770 | $ 6,18,320 |
Investments | $ - | $ 2,30,000 |
Land | $ 3,26,000 | $ - |
Equipment | $ 7,05,120 | $ 5,53,200 |
Accumulated depreciation-equipment | -$ 1,66,400 | -$ 1,48,000 |
Total assets | $ 23,56,500 | $ 20,45,000 |
Liabilities | ||
Accounts payable (merchandise creditors) | $ 4,32,930 | $ 3,91,800 |
Accrued expenses payable (operating expenses) | $ 41,160 | $ 53,630 |
Dividends payable | $ 24,000 | $ 19,200 |
Total liabilities | $ 4,98,090 | $ 4,64,630 |
Stockholders' Equity | ||
Common stock, $4 par | $ 2,87,500 | $ 1,00,000 |
Paid-in capital in excess of par | $ 2,80,000 | $ 2,80,000 |
Retained earnings | $ 12,90,910 | $ 12,00,370 |
Total stockholders' equity | $ 18,58,410 | $ 15,80,370 |
Total liabilities and stockholders' equity | $ 23,56,500 | $ 20,45,000 |
Statement of Cash Flows Your supervisor has provided you with the following statement of cash flows,...
Championship Boxing, Inc. Statement of Cash Flows For the Year Ended December 31, 20Y8 Cash flows from (used for) operating activities: Net income $186,540 Adjustments to reconcile net income to net cash flow from operating activities: Depreciation 18,400 Gain on sale of investments (50,000) Changes in current operating assets and liabilities: Increase in accounts receivable (25,410) Increase in inventories (33,450) Increase in accounts payable 41,130 Decrease in accrued expenses payable (12,470) Net cash flow from operating activities $124,740 Cash flows...
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Need help on retained earnings and total stockholder's equity Mastery Problem: Statement of Cash Flows Championship Boxing, Inc. Championship Boxing, Inc. is a small manufacturer of cardboard boxes of all sizes. You have reported for your first day of work, and the company is in an uproar. Yearly financial statements are being prepared, but a computer malfunction of the company's new BOX-9000 computer has inadvertently erased parts of the company's balance sheet, along with almost all related data except the...
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