Question

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G25 Innovation Electronics, Inc. Statement of Cash Flows For the Year Ended December 31, 20x2 Additional information for 20X2 1. Assume that all increases and decreases in long term assets, long term liabilities, and common stock are as a result of cash transactions. 2. Land costing $46,500 was sold, resulting in a gain of $6,500. No other Cash Flows from Operating Activities: Net Income Adjustments to reconcile net income to net cash provided by operating activities: long term assets were sold. .Additional long-term investments were purchased 4. An additional long-term note payable was signed. No repayments on notes were made. 5. Additional common stock was issued. 10 Changes in current assets and current liabilities: 12 13 e of land 15 16 17 18 19 Net cash provided by (used in) operating activities Cash Flows from Investing Activities 21 23 24 25 26 27 28 Net cash provided by (used in) investing activities Cash Flows From Financing Activities: Net cash provided by (used in) financing activities Net increase (decrease) in cash Cash at beginning of the period Cash at theend of the period 30 31 32 Innovation Electronics, Inc. Balance Sheet At December 31 20x1 20X2 Assets Current Assets: 184,420 68,700 134,500 Cash Accounts Receivable Inventory Prepaid Insurance Long-term assets: Investments Land Equipment Accumulated Deprection 25,740 (158,680) 83,000 14,300 128,000 (6,500) 1,580 10 2,980 4,560 12 13 14 15 16 17 18 19 20 21 211,000 208,500 203,000 (117,500) 120,000 (91,000) 255,000 46,500 203,000 (101,500 16,000 $895,600 $ Total Assets 717,800 Liabilities and Stockholders' Equity Current Liabilties: 2Accounts Payable 26,500 3,400 30,200 81,000 54,500 2,300 (1,100) 2,300 23 24 Interest Payable Income tax payable 32,500 25 Long-term liabilities: Notes payable 26 27 28 29 30 31 32 255,000 242,000 (13,000) Stockholders'Equity Common Stock Retained Earnings 273,000 307,500 230,000 (43,000) 130,000 (177,500) Total Liabilities and Stockholders' Equity $895,600 $ 717,800 32 Innovation Electronics, Inc. Income Statemnt For the Year Ended December 31, 20X2 34 35 36 37 38 39 40 41 42 43 Net Sales Cost of Goods Sold $2,430,000 1,565,000 Gross profit Operating Expenses Depreciation expense 865,000 598,000 16,000 Income before income taxes 251,000 45 46 47 48 49 50 51 52 53 54 Other income (expense): Interest expense Income tax expense Gain on sale of land (17,000) (63,000) 6,500 73,500 Net Income after income taxes 177,500

Answer 1

nnovative Electronics, Inc Statement of Cash flows For the Year Ended December 31.20X2 Cash flows from Operating Activities: Net Income Adiustments to reconcile Net Income to Net Cash Provided by Operating activities Depreciation expenses Gain on sale of Land Decreases in accounts Receivables Increases in Inventory Decrease in Prepaid Insurance Decrease in Accounts Payable Increase in Interest Payable Decreases in Income Taxes payable Net Cash provided by operating activities Cash Flows from Investing Activities Purchase of Investments Sale of Land Net Cash Used by Investing activities Cash Flows from Financing Activities Issuance of Stock Issuance of Notes Payable Payment of dividends Net Cash used by Financing activities Net Increase in Cash Beginning Cash balance Ending Cash balance S 177,500 S 16,000 S (6,500) S 14,300 S (6,500) S 1,580 S (54,500) S 1,100 S 2.300S (36,820) S 140,680 S (91,000) S 53,000 S (38,000) S 43,000 S 13,000 S 56.000 S 158,680 S 25,740 S 184,420

Sale of Land Closing balance of Land Less: Opening balance of Land S 255,000 S 208,500 S 46,500 S 6,500 S 53,000 Add: Gain on sale of Land