Question

Yoric Company listed the net changes In its balance sheet accounts for the past year as follows Debits Credits > Credits by: Debits by: $ 17,000 Cash Accounts receivable Inventory Prepaid expenses Long-term loans to subsidiaries Long-term investments Plant and equipment Accumulated depreciation Accounts payable Accrued liabilities Income taxes payable Bonds payable Common stock Retained earnings 119,000 $ 65,006 8,000 30,000 80,000 220,000 5,000 32,000 9,000 16,000 400,000 179,000 50,000 $606,000 $606,000 The following additional Information is avallable about last year's activities a. Net income for the year was $ ? b. The company sold equipment during the year for $15,000. The equipment originally cost $50,000 and it had $37,000 In accumulated depreciation at the time of sale c. Cash dividends of $20,000 were declared and pald during the year d. The beginning and ending balances In the Plant and Equipment and Accumulated Depreciation accounts are given below Plant and equipment Accumulated depreciation Beginning Ending $1,580,000 $1,800,000 675,000 680,000 e. The balance In the Cash account at the beginning of the year was $23,000; the balance at the end of the year was $? f. If data are not given explalning the change In an account, make the most reasonable assumption as to the cause of the change

Answer 1

	Statement of cash flow
	Operating activities:
	Net Income						70,000
	Adjustments to convert net income to a cash
	basis:
	Depreciation					42,000
	Gain on sale of Equipment					-2,000
	increase in accounts payable					32,000
	increase in accounts receivable					-110,000
	increase in income taxes payable					16,000
	Decrease in prepaid expense					8,000
	decrease in inventory					65,000
	Decrease in accured liabilities					-9,000
							42,000
	net cash provided byoperating activities						112,000
	Investing Activities
	Proceeds from sale of Equipment					15,000
	Addittions to plant and Equipment					-270,000
	Addittions to long term investment					-80,000
	Decrease in long term loans to subsidiaries					30,000
	net cash used in investing activities						-305,000
	Financing activities
	Repurchase of common stock					-170,000
	dividend paid					-20,000
	issuance of bonds payable					400,000
	Net cash provided by financing activities						210,000
	net increase in cash						17,000
	Beginning cash and cash equivalent						23,000
	Ending cash and cash equivalent						40,000

Working notes:
Accumulated depreciation
ending balance			680,000
opening balance		675,000
less sold equipment		37000	638,000
Depreciation expense			42,000
Addittions to plant and Equipment
ending balance			1,800,000
opening balance		1,580,000
sold during the yr		-50,000	1,530,000
Addittions to plant and Equipment			270,000