Question

Championship Boxing, Inc. Statement of Cash Flows Balance Sheet Championship Boxing, Inc. Championship Boxing, Inc. is a small manufacturer of cardboard boxes of all sizes. You have reported for your first day of work, and the company is in an uproar. Yearly financial statements are being prepared, but a computer malfunction of the company's new BOX-9000 computer has inadvertently erased parts of the company's balance sheet, along with almost all related data except the company's statement of cash flows. The IT department is working to retrieve earlier backups, but estimates that the reconstruction of the data will take about 24 hours Unfortunately, financial statements are to be presented at a stockholders' meeting in one hour. The company uses the indirect method to prepare its statement of cash flows rather than the direct method), so your new supervisor believes the missing data for the balance sheet can be prepared using the statement of cash flows. You are assigned this task, since you were top studer in your business school class. Meanwhile, the supervisor will go to the stockholders' meeting and give some introductory remarks In addition to the statement of cash flows, the following data survived the computer mishap: A. The investments were sold for $280,000 cash. B. Equipment was acquired for $152,080 cash. C. Land was acquired for $326,000 cash. D. There were no disposals of equipment during the year. E, 12,500 shares of common stock were sold for cash during the year. E There was a $96,000 debit to retained Earnings for cash dividends declared.

Answer 1

Championship Boxing, Inc.
Comparative Balance Sheet
December 31, 20Y8 and 20Y7
	Dec. 31, 20Y8	Dec. 31, 20Y7
Assets
Cash	608990	585920
Accounts receivable (net)	230970	205580
Inventories	651770	618420
Investments	0	230000
Land	326000	0
Equipment	705200	553120
Accumulated depreciation-equipment	-166400	-148000
Total assets	2356530	2045040
Liabilities
Accounts payable (merchandise creditors)	432930	391800
Accrued expenses payable (operating expenses)	41150	53630
Dividends payable	24000	19200
Total liabilities	498080	464630
Stockholders' Equity
Common stock ($4 par)	50000	100000
Paid-in capital in excess of par	517500	280000
Retained earnings	1290950	1200410
Total stockholders' equity	1858450	1580410
Total liabilities and stockholders' equity	2356530	2045040

Working:

Championship Boxing, Inc.
Comparative Balance Sheet
December 31, 20Y8 and 20Y7
	Dec. 31, 20Y8	Dec. 31, 20Y7
Assets
Cash	608990	585920
Accounts receivable (net)	230970	=230970-25390
Inventories	=618420+33350	618420
Investments	0	=280000-50000
Land	=0+326000	0
Equipment	705200	=705200-152080
Accumulated depreciation-equipment	-166400	=-166400+18400
Total assets	=SUM(C7:C13)	=SUM(D7:D13)
Liabilities
Accounts payable (merchandise creditors)	=391800+41130	391800
Accrued expenses payable (operating expenses)	41150	=41150+12480
Dividends payable	=19200+96000-91200	19200
Total liabilities	498080	=SUM(D17:D19)
Stockholders' Equity
Common stock ($4 par)	=100000-(12500*4)	=1580410-280000-1200410
Paid-in capital in excess of par	=1858450-50000-1290950	280000
Retained earnings	1290950	=1290950-186540+96000
Total stockholders' equity	1858450	=2045040-464630
Total liabilities and stockholders' equity	=C14	=D14