The comparative balance sheets for Grouper Corporation show the
following information.
December 31 |
||||
2017 |
2016 |
|||
Cash |
$33,600 |
$13,100 |
||
Accounts receivable |
12,100 |
10,100 |
||
Inventory |
11,900 |
9,000 |
||
Available-for-sale debt investments |
–0– |
3,100 |
||
Buildings |
–0– |
29,800 |
||
Equipment |
45,500 |
20,100 |
||
Patents |
5,000 |
6,200 |
||
$108,100 |
$91,400 |
|||
Allowance for doubtful accounts |
$3,100 |
$4,400 |
||
Accumulated depreciation—equipment |
2,000 |
4,600 |
||
Accumulated depreciation—building |
–0– |
6,100 |
||
Accounts payable |
5,000 |
3,100 |
||
Dividends payable |
–0– |
4,900 |
||
Notes payable, short-term (nontrade) |
3,100 |
4,100 |
||
Long-term notes payable |
31,000 |
25,000 |
||
Common stock |
43,000 |
33,000 |
||
Retained earnings |
20,900 |
6,200 |
||
$108,100 |
$91,400 |
Additional data related to 2017 are as follows.
1. | Equipment that had cost $10,800 and was 40% depreciated at time of disposal was sold for $2,600. | |
2. | $10,000 of the long-term note payable was paid by issuing common stock. | |
3. | Cash dividends paid were $4,900. | |
4. | On January 1, 2017, the building was completely destroyed by a flood. Insurance proceeds on the building were $29,900 (net of $2,000 taxes). | |
5. | Investments (available-for-sale) were sold at $1,700 above their cost. The company has made similar sales and investments in the past. | |
6. | Cash was paid for the acquisition of equipment. | |
7. | A long-term note for $16,000 was issued for the acquisition of equipment. | |
8. | Interest of $2,000 and income taxes of $6,600 were paid in cash. |
Prepare a statement of cash flows using the indirect method. Flood
damage is unusual and infrequent in that part of the country.
(Show amounts that decrease cash flow with either a -
sign e.g. -15,000 or in parenthesis e.g.
(15,000).)
Grouper Corporation | |||
Statement of Cash flows | |||
For the Year Ended December 31, 2017 | |||
Cash flows from operating activities | |||
Net Income | $ 14,700 | ||
Adjustments to reconcile net income to ; | |||
Net cash provided by operating activities | |||
Depreciation expense | $ 1,720 | 2000-4600+(10800*40%) | |
Patent amortization | $ 1,200 | ||
Loss on sale equipment | $ 3,880 | (10800*60%)-2600 | |
Gain from flood damage | $ (8,200) | 29800-6100-29900-2000 | |
Gain on sale of investment | $ (1,700) | ||
Increase in accounts receivable | $ (3,300) | 10100-12100+3100-4400 | |
Increase in inventory | $ (2,900) | ||
Increase in accounts payable | $ 1,900 | ||
$ (7,400) | |||
Net cash provided by operating activities | $ 7,300 | ||
Cash flows from investing activities | |||
Sale of investment | $ 4,800 | 3100+1700 | |
Proceeds from Flood damage of building | $ 31,900 | 29900+2000 | |
Sale of equipment | $ 2,600 | ||
Purchase of equipment | $ (20,200) | 20100-45500-10800+16000 | |
Net cash used by investing activities | $ 19,100 | ||
Cash flows from financing activities | |||
Payment of short term note payable | $ (1,000) | ||
Payment of dividends | $ (4,900) | ||
Net cash provided by financing activities | $ (5,900) | ||
Net Increase in cash | $ 20,500 | ||
Cash and cash equivalents at beginning of period | $ 13,100 | ||
Cash and cash equivalents at end of period | $ 33,600 | ||
Supplimental disclosure of cash flow information | |||
Cash paid during the year for interest | $ 2,000 | ||
Cash paid during the year for income tax | $ 6,600 | ||
Non cash financing and investing activities | |||
Long term note payable was paid by issuing common stock | $ 10,000 | ||
Equipment acquired by issuing long term note | $ 16,000 |
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December 31
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Accounts receivable
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Inventory
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