Question

Jacobson Manufacturing Corporation earned $85,000 in profit during 2017. Machinery was sold for $115,000 and a $25,000 loss on the sale was recorded. Machinery purchases totalled $340,000 including a July purchase for which an $104,000 promissory note was issued. Bonds were retired at their face value, and the issuance of new common shares produced an infusion of cash. Jacobson's comparative balance sheets were as follows: Jacobson Corporation Comparative Balance Sheet Information (in thousands) December 31 Assets 2017 2016 Cash $ 134 $ 102 Accounts receivable 226 Merchandise inventory 372 340 Machinery 1,650 1,560 Accumulated depreciation (250) (270) 270 Total assets $2,132 $2,002 Liabilities and Equity Accounts payable Notes payable Dividends payable Bonds payable Common shares Retained earnings $ 408 320 44 240 776 344 $ 472 240 32 338 620 300 Total liabilities and equity $2,132 $2,002

Answer 1

go Answing Jacobson's Depreciation ? book value of machinery sold = sales price of machinery + Loss on sale of machinery = $115 + $25 = $140. cost price of machinery dotad = frackinusy at the beginning of your + machinery purchased) - (machinery at the end d you) = (1,560 +340) - (1,650) = (1900)- (1650) = 250 Accumulated depreciation on machinery sold = (Cast price o machinery sold) : - (book valune de machinery

= 250-140 = 110 Depucciation Expense during the year = (accumulatid at the end of year 2017) +faccumulated Depreciation on machinery sold) - Cactumulated depreciation et the end of year 2016). = (250 +110) - (270) = 360 - 270 = 90 - Depreciation Expense during the year = 90 @ cash flow from opererting activities : net cash flow from operating activitiny = (net income + loss on sale . of machinery + Depreciation Expense + Decrease in accounts ro

(increase in merchandise inventory). + (Decrease in accounts payable) = 85+25+90+(270–226) + (340 – 372)+ (412-408) = 85 426 +90 +(44) + (-32)+(6u). = 85725 +90+44 - 32 +64 = 276 | net cash flow from operating activities = 276 ) cash flows from investing activities : Heren sales o machinery = ns. SO cash flows from investing activities = 15 ) 4 Dividend Declared: Dividend declared = retained Earnings at beginning d year + net income during the year – Retained Earning and year end.

= 300+85- 344 = 385-344 . Dividend dui laud = 42 Dividend paid during the year = (Dividend payable at the beginning of yoag)+(Dividend declared)-(pividend payable at end of year) I sat uy-44 = 76-44 3a. ... Pridend paid during the you = 3a] ③ Difference blw cash inflows & out flows, = cash balance at the End do you -- Cash balance at the beginning of year = 134-102 - 32 L. Diff blw cash inflows & cash out flows = 32