Spreadsheet and Statement
The following 2016 information is available for Stewart Company:
Condensed Income Statement for 2016 | ||
---|---|---|
Sales | $9,000 | |
Cost of goods sold | (6,000) | |
Other expenses | (2,000) | |
Loss on sale of equipment | (260) | |
Gain on sale of land | 400 | |
Net income | $1,140 |
Comparative Balance Sheets | ||||
---|---|---|---|---|
December 31, 2015 |
December 31, 2016 |
|||
Cash | $700 | $1,130 | ||
Accounts receivable | 450 | 310 | ||
Inventory | 350 | 400 | ||
Land | 300 | 500 | ||
Equipment | 1,600 | 1,800 | ||
Less: Accumulated depreciation | (200) | (150) | ||
Total Assets | $3,200 | $3,990 | ||
Accounts payable | $600 | $750 | ||
Bonds payable (due 1/1/2018) | 1,000 | 1,000 | ||
Common stock, $10 par | 900 | 1,400 | ||
Retained earnings | 700 | 840 | ||
Total Liabilities and Shareholders' Equity | $3,200 | $3,990 |
Partial additional information:
Required:
Making whatever additional assumptions that are necessary,
1. Prepare a spreadsheet to support a 2016 statement of cash flows for Stewart. If an amount is zero, enter "0".
STEWART COMPANY | |||||
Cash Flows Worksheet | |||||
For Year Ended December 31, 2016 | |||||
Balances 12/31/2015 |
Balances 12/31/2016 |
Balances Change |
Worksheet Entries Debit |
Worksheet Entries Credit |
|
Debits | |||||
Cash | |||||
Noncash Accounts: | |||||
Accounts receivable | |||||
Inventory | |||||
Land | |||||
Equipment | |||||
Totals | |||||
Credits | |||||
Accumulated depreciation | |||||
Accounts payable | |||||
Bonds pay. (due 1/1/2021) | |||||
Common stock, $10 par | |||||
Retained earnings | |||||
Totals | |||||
Cash Flow From Operating Activities | |||||
Net income | |||||
Add: Decrease in accounts receivable | |||||
Add: Loss on sale of equipment | |||||
Add: Depreciation expense | |||||
Add: Increase in accounts payable | |||||
Less: Increase in inventory | |||||
Less: Gain on sale of land | |||||
Cash Flows From Investing Activities | |||||
Proceeds from sale of land | |||||
Payment for purchase of land | |||||
Proceeds from sale of equipment | |||||
Payment for purchase of equipment | |||||
Cash Flows From Financing Activities | |||||
Proceeds from issuance of common stock | |||||
Payment of dividends | |||||
Net increase in cash | |||||
Totals | $ | $ |
2. Prepare the statement of cash flows. Use the minus sign to indicate cash outflows, a decrease in cash or cash payments.
STEWART COMPANY | ||
Statement of Cash Flows | ||
For Year Ended December 31, 2016 | ||
Operating Activities: | ||
$ | ||
Adjustment for noncash income items: | ||
Adjustments for cash flow effects from working capital items: |
||
$ | ||
Investing Activities: | ||
$ | ||
Financing Activities: | ||
$ | ||
$ | ||
Cash, January 1, 2016 | ||
Cash, December 31, 2016 | $ |
Answer 2 | ||
Cash flow statement using indirect method | ||
STEWART COMPANY | ||
Statement of Cash Flows | ||
for the year ended December 31,2016 | ||
Cash flow from Operating activities | ||
Net Income | $1,140.00 | |
Adjustments for non cash items | ||
Depreciation Expense | $50.00 | |
Loss on sale of equipment | $260.00 | |
Gain on sale of land | -$400.00 | |
Adjustments for cash flow effects from working capital items: |
||
Decrease in Accounts Receivable | $140.00 | |
Increase in Inventory | -$50.00 | |
Increase in Accounts Payable | $150.00 | |
$150.00 | ||
Net Cash provided by Operating activities | $1,290.00 | |
Cash flow from Investing activities | ||
Sale of Land | $530.00 | |
Purchase of equipment | -$600.00 | |
Purchase of Land | -$330.00 | |
Sale of equipment | $40.00 | |
Net cash provided by Investing activities | -$360.00 | |
Cash flow from Financing activities | ||
Issuance of Common stock | $500.00 | |
Payment of dividends | -$1,000.00 | |
Net Cash used for Financing activities | -$500.00 | |
Net Cash Surplus (deficit) | $430.00 | |
Cash, January 1, 2016 | $700.00 | |
Cash, December 31, 2016 | $1,130.00 | |
Working | ||
Depreciation expense for 2016 | ||
Accumulated depreciation for 2016 | $150.00 | |
Add: Accumulated depreciation on equipment sold [$400-$300] | $100.00 | |
Less : Accumulated depreciation for 2015 | $200.00 | |
Depreciation expense for 2016 | $50.00 | |
Dividend Paid | ||
Retained earnings as on Dec.31,2015 | $700.00 | |
Add : Net Income for 2016 | $1,140.00 | |
Less : Retained Earnings as on Dec.31,2016 | $840.00 | |
Dividend Paid | $1,000.00 | |
Equipment Purchases | ||
Cost of equipment as on Dec.31,2016 | $1,800.00 | |
Add: Cost of equipment sold | $400.00 | |
Less : Cost of equipment as on Dec.31,2015 | $1,600.00 | |
Equipment Purchases | $600.00 | |
Land Purchases | ||
Cost of Land as on Dec.31,2016 | $500.00 | |
Add: Cost of Land sold | $130.00 | |
Less : Cost of Land as on Dec.31,2015 | $300.00 | |
Land Purchases | $330.00 | |
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