Question

1. (10 points) Presented below is a condensed version of the comparative balance sheets for Bridgeport Corporation for the last two years at December 31. 2016 Cash Accounts receivable Investments Equipment Accumulated Depreciation Equipment Current liabilities Common stock Retained earnings 2017 $ 230,100 234,000 67,600 387,400 (137,800 ) 174,200 208,000 399,100 240,500 96,200 312,000 (115,700 ) 196,300 208,000 230,100 Additional information: Investments were sold at a loss of $13,000; no equipment was sold; cash dividends paid were $39,000; and net income was $208,000.

prepare a statement of cash flows

Answer 1

Bridgeport Corporation statement of cash flows for the year Ended December 31, 2017 Cash flows from operating activities: . Met Income $ 108,000 Adjustments to reconcite net income to net cash provided by operating activities: Depreciation expense $22,100 Los on sale of investments $13,000 Decrease in accounts receivable $6,500 Decrease in current liabilities $(22,100) $19,500 Net cash provided by operating activities $227,500 Cash flows from investing activities: sale of investments $15,600 Purchase of equipment $(75,400) I Net cash used by investing activities $159,800) Cash flows from financing activities: Payment of cash dividends $(39,000) Net cash used by financing activities $(39,000) Net increase (decrease) in cash $ 128,700 cash at beginning of year $ 101,400 cash at end of year $230,000

Calculations Depreciation = $137,800 – $115,700 - $22,100 Decrease in accounts receivable = $240,500 - $234,000 = $6,500 Decrease in current liabilities = $196,300 - $174,200 - $22,100 Sale of investment & Investment 2016 - Investment 2017 - Loss on investment = $ 96,200 - $ 67,600 - $13,000 = $15,600 Purchase of equipment = $387,400 - $312,000 - $75,400