Question

NOTES Providing (well labeled & well organized) computations, schedules, etc. will maximize partial credit for incorrect answers e Solution is posted in the course space 24 hours after problem due date problems will not be accepted for credit once the solution is posted. Prepare a 2017 Statement of Cash Flows for the Boyd Company in good form, including required supplemental disclosures. The operating activities section may be prepared using either the direct or the indirect method (both result in the same Cash Flow from Operations amounts. Boyd Company Income Statement For the year ended 12/31/17 $1,200,000 690,000) 510,000 Sales Cost of Goods Sold Gross Margin Operating Expenses Income from Operations Other Revenue&Expense: Investment Revenue Gain on sale of equipment Interest Expense S 135,000 25,000 8,000 7,000 $ 161,000 Income before Tax Income Tax Expense Net Income 56,000) S 105,000 Boyd Company Balance Sheet- As of 12/31/17 and 12/31/16 2017 2016 ASSETS Cash Accounts Receivable Allow for Dbtful Accts Inventory Prepaid Rent Equity Investments Equipment Accumulated Depreciation 100,000 S 52,400 40,000 $58,500 1.900) $45,700 1,000 56,600 87,000 14,000 310,000 44,700 63,000 16,000 285,000 $380,000 $266,300 280,000 $800,000 75,000) 191.300 Total Assets $640,00 LIABILITIES& OWNERS' EQUITY Accounts Payable Interest Payable Bonds Payable Discount on Bonds Payable 27,000 Deferred Tax Liability Common Stock Paid in Capital in Excess of Par Retained Earnings 59,000 30,000 S 48,000 43,000 $400,000 $400,000 373,000 90,000 50,000 80,000 30,000 370,000 75,000 10,000 40,000 54,000 Total Liabilities & Owners' Equity $800,000 $640,00 See Additional Information on next page.

Additional Information:
1. Equipment with an original cost of $90,000 and accumulated depreciation of $60,000 was sold for cash.
2. Depreciation, amortization, and bad debt expense are included in operating expenses.
3. Boyd accounts for their investment in XYZ using the equity method. XYZ Company paid no cash dividends during 2017.
4. Boyd declared and paid cash dividends during the year.
Check Figure:
 Cash from Operating Activities $139,100

Answer 1

enovO Table Tools Cash flow statements Boyd company Cash fliow from operating activity 105000 Net income as per income statements Add Depreciation 85,000 Amortization on discount of bonds (30000-27000) 3,000 Income tax expenses Less gain on sale of equipment's Investment income (285000-310000) Cash flow before change in working capital Interest payable Account receivable Inventory Prepaid rent Account payable Cash flow after change in working capital Less income tax paid Cash flow from operating activity 56,000 -8000 25000 216000 13000 -11900 -24000 2000 11000 180100 41000 139100 139100 English (Indiaj

enovo Table Tools Cash flow from investing activity Purchase of equipment Sale of equipment Cash flow from investing activity 203700 38000 165700 Cash flow from financing activity Dividend paid -41000 Issued of common stock (50000-10000-40000 additional paid in capital and 80000-40000 40000 common stock)( Cash flow from financing activity 80000 Cash flow from all activity or net change in cash Beginning cash balance Ending cash balance 39,000 12400 40000 52400 English (India

enovO Table Tools Original cost of equipment Less accumulated depreciation Book value Gain on sale of equipment Equipment sold 90000 -60,000 30,000 8,000 38,000 Equipment a/c Debit (S) Particulars Particulars Balance b/d Cash a/c (purchase of equipment) 203700 Cash a/c Gain on sale of equipment Credit 266300 Accumulated deprecation 60,000 38000 figure 8000 Balance c/d Accumulated depreciation alc Debit (5) Particulars 478000 380000 478000 Particulars Credit Equipment Balance c/d 60000 Balance b/d 100000 Depreciation expenses 75000 85000 balancing figure) 160000 160000

enoMO Table Tools Retained earning alc Particulars Debit ($) Particulars Credit Dividend paid (balancing figure41000 Balance b/d 54000 Net income (as per income 105000 statements) 118000 159000 Balance c/d 159000 Equity investment a/c Particulars Debit ($) Particulars Credit 285000 Balance b/d Investment income 25000 310000 Differed tax liability a/c Balance c/d 310000 310000 Particulars Tax paid (balancing figure) Balance c/d Debit (S) Particulars Credit 75000 56000 41000 Balance b/d Tax expenses 90000 131000 131000 English (Indial

enoOVO Effect of working capital For current liability (2017-2016) (balance of ending year- balance of beginning of year) For current assets (2016-2017) (balance of beginning year- balance of ending of year) 38 English ündial