Question

ACC 500 Financial Statement Exercise Ozark's 2016 Net Income was 140,000. Equipment purchases were made with cash. The increase in common stock and additional paid-in capital is due to issuing additional shares for cash. Comparative balance sheets for Ozark follow Prepare a statement of Cash Flows using the template provided. 2016 2015 Assets Cash Accounts receivable Inventories Prepaids Land Building and equipment Less: Accumulated depreciation Total assets XXX 199, 250 250,000 13,000 250,000 1,500,000 -205,000 2,465,950 472,000 71,500 278,800 xxx 250,000 1,300,000 -175,000 2,208,300 XXX 10,500 22,000 93,950 15,000 xxx Liabilities Accounts payable Accrued expenses Income taxes payable Stockholders' equity Common stock Paid in capital in excess of par Retained earnings Total liabilities and equity 710,000 990,000 646,350 XXX 700,000 800,000 586,350 XXX Page 1 of 2

Answer 1

Cash Flow Statement
Particulars	Amount (in $)	Amount (in $)
Cash Flows from Operating Activities
Net Income	1,40,000
Add/(deduct) non cash effects on operating income
Depreciation Expense	30,000
Change in accounts Receivable	-1,27,750
Change in inventory	28,800
Change in Prepaid Insurance	-2,000
Change in accounts Payable	-6,850
Change in accrued Expenses	-4,500
Change in Income Tax Payable	9,000
Net Cash Provided by Operating Activities		66,700
Cash Flows from Investing Activities
Purchase of Equipment	-2,00,000
Net Cash used by Investing activities		-2,00,000
Cash Flows from Financing Activities
Proceeds from Issuing Stock	2,00,000
Dividends on common	-80,000
Net Cash Provided by Financing Activities		1,20,000
Net decrease in cash		-13,300
Cash Balance at January 1,2016		4,72,000
Cash balance at December 31,2016		4,58,700
Workings-
Balance Sheets
	2016	2015
Assets
Cash	4,58,700	4,72,000
Accounts Receivable	1,99,250	71,500
Inventories	2,50,000	2,78,800
Prepaid	13,000	11,000
Land	2,50,000	2,50,000
Building & Equipment	15,00,000	13,00,000
Less: Accumulated depreciation	-2,05,000	-1,75,000
Total Assets	24,65,950	22,08,300
Liabilities
Accounts Payable	87,100	93,950
Accrued Expenses	10,500	15,000
Income tax Payable	22,000	13,000
Shareholders equity
Common Stock	7,10,000	7,00,000
Paid in capital	9,90,000	8,00,000
Retained Earnings	6,46,350	5,86,350
	24,65,950	22,08,300
Calculation of Dividends given
Opening Retained earnings	5,86,350
Add: net profit	1,40,000
Less:Retained Earnings at the end	6,46,350
Dividends Distributed	80,000
Note-
1. In 2015 Prepaid is the balancing figure arriving from total assets figure given minus other assets
2. In 2015 Income tax payable is the balancing figure
3.In 2016 Cash is the balancing figure arrived from total assets figure minus other assets
4. Accounts payable also the balancing figure