Question

Required information The following information applies to the questions displayed below.) The following financial statements and information are available for Zachary Industries Inc. Balance sheets As of December 31 Year 3 Year 2 $ Assets Cash Accounts receivable Inventory Marketable securities (available for sale Equipment Nccumulated depreciation Land 162,900 106,000 188, 900 297,800 690,200 (306,800) 82,700 1,221,700 $ 123,400 87,500 174,500 222.900 493,200 (237,000) 118,000 982.500 $ 39,000 229,700 206,000 474,700 68,900 252.900 103,000 424.800 Total assets Liabilities and equity Liabilities Accounts payable (inventory) Notes payable-Long-term Bonds payable Total liabilities Stockholders' equity Common stock, no par Preferred stock, $50 par Paid-in capital in excess of par-Preferred stock Total paid-In capital Retained earnings Less: Treasury stock Total stockholders' equity Total liabilities and stockholders' equity 243,000 113,300 37,200 393,500 391,600 (39, 100) 747,000 $1.221,700 203,300 103,300 31,200 337,800 268,000 148, 100) 557,700 S 982.500 $1,052,700 (769, 100) 283,600 Income Statement For the Year Ended December 31, Year 3 Sales revenue Cost of goods sold Gross profit Operating expenses Supplies expense $23,300 Salaries expense 74,700 Depreciation expense 93,100 Total operating expenses Operating income Nonoperating items Interest expense Gain from the sale of marketable securities Gain from the sale of land and equipment Net income (191, 100) 92,500 (14,200) 35,300 21,400 135,000 $

Part 1:

Part 2:

Answer 1

Zachary Industries

Cash Flow Statement
Direct Method
Cash flow from Operating Activities
Cash collected from customers		$   10,34,200.00		=1052700+87500-106000
Cash paid for inventory		$    -8,13,400.00		=-(769100+68900-39000+188900-174500)
Cash paid for Supplies		$       -23,300.00
Cash paid for Salaries		$       -74,700.00
Cash paid for interest		$       -14,200.00
Cash from operating activities			$       1,08,600.00
Cash flow from Investing Activities
Sale of Land		$         39,300.00
Sale of Equipment		$         21,200.00
Purchase of Equipment		$    -2,24,100.00
Sale of marketable securities		$         82,000.00
Purchase of marketable securities		$    -1,21,600.00
Cash used in investing activities			$     -2,03,200.00
Cash flow from Financing Activities
Issue of Common stock		$         39,700.00		=243000-203300
Issue of Preferred stock		$         16,000.00		=113300+37200-103300-31200
Payment of Long term notes payable		$       -23,200.00
Issue of Bonds		$     2,06,000.00
Repayment of bonds		$    -1,03,000.00
Sale of Treasury Stock		$         10,000.00		=48100-38100
Dividend Paid		$       -11,400.00		=-(268000+135000-391600)
Cash from financing activities			$       1,34,100.00
Net Increase in cash			$          39,500.00
Opening Balance of Cash			$       1,23,400.00
Closing Balance of Cash			$       1,62,900.00

b. Cost per treasury Stock = $10000 / 100 = $100 per share

Number of shares issued = $10000/$50 = 200 shares
Issue price of preferred stock = $16000 / 200 = $80 per share

Book Value of Equipment sold = $27100-23300 = $3800

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