Question

Problem 13-24 Blake Weaver, Oriole Enterprises' controller, is preparing the financial statements for 2016. He has completed the comparative balance sheets and income statement, which follow, and has gathered this additional information: On December 31, 2016, Oriole sold a piece of equipment with an original cost of $25,280 for $30,260 cash. The equipment had a book value of $13,720. On February 1, 2016, Oriole issued $99,630 of common stock to raise cash in anticipation of the purchase of a new building later in the year. On February 2, 2016, Oriole took out a ten-year $76,370 long-term loan to provide the remaining funds needed to purchase the building. On May 15, 2016, Oriole paid $146,020 for the new building. The company repaid $4,600 of the long-term debt before the end of the year. • Oriole Enterprises Income Statement For the Year Ended December 31, 2016 Sales revenue $ 1,073,600 Gain on equipment sale 16,540 Total revenue 1,090,140 Cost of goods sold 703,700 Operating expenses Depreciation expense $ 30,410 Interest expense 7,940 Wages expenses 175,900 Other expenses 16,150 230,400 Income before taxes 156,040 Tax expense 63,470 Net income $ 92,570

Answer 1

Statement of Cash Flows
For the Year Ended December 31, 2016
Cash flows from operating activities
Net income / (loss)		92570
Adjustments to net income
Depreciation	30410
Gain on sale of equipment	-16540
Increase in accounts receivable	-17210
Increase in inventories	-31160
Decrease in accounts payable	-25930
Decrease in income taxes payable	-2880
		-63310
Net cash provided by operating activities		29260
Cash flows from investing activities
Purchase of building	-146020
Sale of equipment	30260
Net cash used by investing activities		-115760
Cash flows from financing activities
Proceeds from long-term debt	76370
Repayment of long-term debt	-4600
Issuance of Common stock	99630
Net cash provided by financing activities		171400
Change in cash		84900
Cash, beginning balance		44700
Cash, ending balance		129600