Question

Chapter 11 - Sushi Emporium COMPREHENSIVE CASH FLOW PROBLEM The accounting team at Sushi Emporium has prepare the following Balance Sheet and income Statement for 2022. Additional note disclosures about key transactions are listed as well. Prepare Sushi Emporium's Statement of Cash Flows for 2022. Cash Accounts receivable Prepaid expenses Buildings Equipment A/D - Equipment Accounts payable Bonds payable Common stock ($1 par) APIC Retained earnings Treasury stock 2021 145,000 10,000 18,000 205,000 95,000 (40,000) 31,000 90,000 5,000 130.000 192,000 (15,000) 2022 212,000 18,000 15.000 225.000 134,000 (60,000) 2,000 150,000 6,000 160,000 236,000 (10,000) 575,000 8,000 Income STATEMENT Revenues Gain on sale of equipment Operating expenses 310,000 Depreciation expense 22.000 Income from operations Income tax expense Net income (332,000) 251.000 90.000 161,000 BUILDINGS: No buildings were sold during the period. One building was purchased and it was done by issuing 200 shares of Common Stock EQUIPMENT: One piece of equipment which was originally purchased for $8,000 was sold. Other equipment was purchased for cash. BONDS: No bonds matured, other bonds were issued for cash. COMMON STOCK: In addition to the building purchase done by issuing common stock, one additional sale of stock occurred at 5 times par value. TREASURY STOCK: No treasury stock was purchased, though some was sold.

please show steps... interested in learning how to do this. Thanks!

Answer 1

Cash flow statement (Indirect method):

Sushi Emporium's
Cash flow statement
For the year ended Dec 31,2022
Cash flow from operating activities:
Net income	$161,000
Adjustments:
Depreciation expense	$22,000
Gain on sale of equipment	($8,000)
Changes in operating assets & liabilities:
Increase in accounts receivable	($8,000)
Decrease in prepaid expenses	$3,000
Decrease in accounts payable	($29,000)
Net Cash flow from operating activities (i)		$141,000
Cash flow from investing activities:
Purchase of equipment	($47,000)
Cash received from sale of equipment	$14,000
Net Cash flow from investing activities (ii)		($33,000)
Cash flow from financing activities:
Proceeds from issuance of bonds	$60,000
Sale of treasury stock	$5,000
Proceeds from issuance of common stock	$11,000
Cash paid for dividends	($117,000)
Net Cash flow from financing activities (iii)		($41,000)
Net increase (decrease) in cash (i)+(ii)+(iii)		$67,000
Cash balance, beginning		$145,000
Cash balance, Ending		$212,000

Calculations:

i. Accumulated depreciation on sold equipment:

A/D-Equipment Account
Equipment (A/D on sold equipment) (Balance figure)	$2,000	Beginning	$40,000
Ending	$60,000	Depreciation expense	$22,000
Total	$62,000	Total	$62,000

ii.Cash received from sale of equipment:

Cash received from sale of equipment
Cost	$8,000
A/D on equipment	($2,000)
Book value	$6,000
Gain on sale of equipment	$8,000
Cash received from sale	$14,000

iii. Purchases of equipment:

Equipment
Beginning	95,000	Cash (sale value)	$14,000
Gain on sale of equipment	$8,000	A/D equipment	$2,000
Purchases (balance figure)	$47,000	Ending	$134,000
Total	$150,000	Total	$150,000

iv. Issuance of bonds:

Bonds payable
Ending	$150,000
Beginning	($90,000)
Issuance of bonds	$60,000

v. Proceeds from issuance of common stock:

Buildings
Ending	$225,000
Beginning	($205,000)
Purchases	$20,000
Apportionment:
Common stock (200 x $1 par )	$200
APIC	$19,800

Common stock
		Beginning	$5,000
Ending	$6,000	Buildings	$200
		Cash (balance figure)	$800
Total	$6,000	Total	$6,000
APIC
		Beginning	$130,000
Ending	$160,000	Buildings	$19,800
		Cash (balance figure)	$10,200
Total	$160,000	Total	$160,000

Proceeds from issuance common stock
Common stock	$800
APIC	$10,200
Total	$11,000

vi. Cash paid for dividends:

Retained earnings
Beginning	$192,000
Net income	$161,000
Ending	($236,000)
Cash paid for dividends	$117,000