Question

2. (25 Points) Comparative balance sheet statements of Irving Inc. are presented below Irving Inc COMPARATIVE BALANCE SHEET ACCOUNTS December 31, 2017 and 2016 December 31 2016 S 20.000 48,000 (1,000) 50,000 2,000 10,000 40,000 250,000 (50,000) S369.000 2017 $ 25,000 45,500 (1,500) 55,000 3,000 13.000 70,000 231,000 (35,000) S406.000 Assets Cash Accounts Receivable Less: Allowance for Doubtful Accounts Iaventory Dividend Receivable Iavestments Land Buildings & Equip. Less Accumulatod depreciation Totals Liabilities Accounts Payable Salaries Payables Interest payable Income tax payable Note payable Bonds Payable Less: Discount on bonds 13,000 2,000 4,000 7,000 20,000 98,000 (2,000) 20,000 5,000 2,000 8,000 70,000 (3,000) Shareholders' Equity Common Stock Paid-in-capital-excess of par Retained earnings Less: Treasury stock (at cost) Total 210,000 25,000 39,000 (10.000) $406.000 200,000 20,000 47,000 0 $369.000 Additional data (all transactions occurred in 2017 unless otherwise specified) 1. There were no write-offs of uncollectible accounts in 2017. 2. A building that originally cost $30,000 with accumulated depreciation balance of $20,000 was sold for $4,000. 3.The common stock of Joys Corporation was purchased for $3,000 as a long-term investment 4. Land was acquired by paying $10,000 cash and issuing a 13% seven-year, $20,000 note payable to the seller 5

Answer 1

	STATEMENT OF CASH FLOW
		Amount in $	Amount in $
	Net income		$             22,000
	Cash flows from operating activities
	Adjustments to reconcile net income to Operating Cash Flow
	Depreciation Expenses	$                5,000
	Loss on the sale of building	$                6,000
	Discount on Bond amortization	$                1,000
	(Increase) / Decrease in Account receivables	$                2,500
	Inventory Decrease / (Increase)	$              -5,000
	Accounts payable Increase / ( Decrese)	$              -7,000
	Decrease in salary payable	$              -3,000
	Incresase in aloowance for doubtfull accounts	$                   500
	Decrease in income tax payable	$              -1,000
	Interest Payable increases	$                2,000
	Net cash from operating activities		$             22,000
	Cash flows from investing activities
	Purchase of Land	$            -10,000
	Purchase of Investment	$              -3,000
	Sales of Building	$                4,000
	Purchase of Equipment	$            -11,000
	Net cash used in investing activities		$            -20,000
	Cash flows from Financing activities
	Purchase of Treasurry Stock	$            -10,000
	Issue of Bonds	$             28,000
	Dividend Paid	$            -15,000
	Net cash used in financing activities		$                3,000
	Net increase in cash and cash equivalents		$                5,000
	Add :Cash and cash equivalents at beginning of period		$             20,000
	Cash and cash equivalents at end of period		$             25,000