Question

INSTRUCTIONS: There are two parts to this handout (A and B). PART A: Statement of Cash Flows A comparative balance sheet for Barker Corporation is presented below. Assets Cash Investments Accounts receivable Inventory Land Equipment Accumulated Depreciation-Equipment Total Liabilities and Stockholders' Equity Accounts payable Bonds payable Common stock ($1 par) Retained earnings Total December 31 2017 2016 $ 72,870 $ 22,000 O 10,000 83,730 67,860 181,730 190,860 72,730 111,860 261,730 201,860 (70,730) (43,860) $602,060 $560,580 $ 35,730 150,000 214,000 202,330 $602,060 S 48,860 200.000 164,000 147,720 $560,580 Additional information: 1. Net Income for 2017 was $118,460. 2. Barker's investment in securities of PMCS Inc. became worthless during 2017 when PMCS Inc. declared bankruptcy. Barker recorded a $10,000 loss on the investment. 3. No other gains or losses were recorded during the year. 4. Cash dividends of $63,850 were declared and paid during 2017. REQUIRED: Prepare Barker's Statement of Cash Flows for 2017 using the indirect method and the template on page 2. Use Illustration 5-23 from page 221 of the textbook as an outline.

Answer 1

Please give positive ratings so I can keep answering. It would help me a lot. Please comment if you have any query. Thanks!

Workings	Amount $
Depreciation & Amortization Expense
Closing Balance- Accumulated Depreciation Equipment	70,730.00
Less: Opening Balance- Accumulated Depreciation Equipment	43,860.00
Increase in Accounts Receivable	26,870.00
Increase in Accounts Receivable
Closing Balance	83,730.00
Less: Opening Balance	67,860.00
Increase in Accounts Receivable	15,870.00
Decrease in Inventory
Closing Balance	181,730.00
Less: Opening Balance	190,860.00
Decrease in Inventory	(9,130.00)
Decrease in Accounts Payable
Closing Balance	35,730.00
Less: Opening Balance	48,860.00
Decrease in Accounts Payable	(13,130.00)
Equipment purchased
Closing Balance	261,730.00
Less: Opening Balance	201,860.00
Equipment purchased	59,870.00
Land sold
Opening Balance	111,860.00
Less: Closing Balance	72,730.00
Land sold	39,130.00
Bonds Payable paid
Closing Balance	150,000.00
Less: Opening Balance	200,000.00
Bonds Payable paid	(50,000.00)
Common Stock issued during the year
Closing Balance	214,000.00
Less: Opening Balance	164,000.00
Common Stock issued during the year	50,000.00
Dividends paid during the year
Opening Balance- Retained Earnings	147,720.00
Add: Net Income	118,460.00
Less: Closing Balance	202,330.00
Dividends paid during the year	63,850.00

Barker Corporation
Cashflow statement	Amount $	Amount $
Particulars
Net Income		118,460.00
Adjustment to reconcile Net Income to Net Cash
Add:
Loss on investment	10,000.00
Depreciation & Amortization Expense	26,870.00	36,870.00
Cash flow from Operations		155,330.00
Changes in Current Assets/Current Liabilities
Increase in Accounts Receivable	(15,870.00)
Decrease in Inventory	9,130.00
Decrease in Accounts Payable	(13,130.00)	(19,870.00)
Net cash provided by operating activities		135,460.00
Cash flow from investing activities
Equipment purchased	(59,870.00)
Land sold	39,130.00
Net cash used for investing activities		(20,740.00)
Cash flow from financing activities
Bonds Payable paid	(50,000.00)
Common Stock issued during the year	50,000.00
Dividends paid	(63,850.00)
Net cash provided by (Used for) financing activities		(63,850.00)
Net Increase/(Decrease) in cash		50,870.00
Cash Balance, beginning		22,000.00
Cash Balance, ending		72,870.00