Question

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Smart Company is preparing its financial statements for the year ended June 30, 2017. The financial statements are complete except for the statement of cash flows. You have been asked to prepare a statement of cash flows for the year ended June 30, 2017. Download the excel spreadsheet found in the link below Required Prepare a spreadsheet to support a statement of cash flows for the year ended June 30, 2017. In the tab named Journal Entries, show in journal entry form, the entries that would be made in preparation of the statement of cash flows. Prepare Smart Company's statement of cash flows for the year ended June 30, 2017. Prepare the statement of cash flows using the indirect method. Note: For full credit, you must prepare the statement of cash flow in good form with all necessary disclosures, including disclosures about noncash financing and investing activities. Submit a well-formatted electronic file, with your last name as the file name. For example, Lastname_PortfolioProject.xls. You are the accountant for Smart Construction Company, a large construction company in Colorado. You have been presented with the following financial information for Smart and asked to prepare the Statement of Cash Flows for the year ended June 30, 2017. You will complete all work for the project in this excel file, which includes the following tabs: Facts - Information taken from Smart's accounting records and additional information regarding the cash flows as of June 30, 2017. Worksheet - Worksheet template (also see Example 21.3a in text) Cash Flows - Statement of Cash Flows template (also see Example 21.3b in text)

Answer 1

4 Account Titles 5 Debits 6 Cash 7 Noncash Accounts: 8 Accounts Receivable 9 Marketable Securities (at cost) 10 Allowance for Change in Value 11 Construction in Process 12 Prepaid Expenses 13 Investments (long-term) 14 Leased Equipment 15 Building 16 Deferred tax asset 17 Land 18 Discount on Bonds Payable 6/30/2016 6/30/2017 Increase (Decrease) Debit Credit 361,700 880,550 518,850518,850 100,000 125,000 11,700 13,000 1,500 1,800 168,750 405,000 45,00010,000 13,500 20,000 25,000 30,000 5,000 300 236,250 (35,000) 13,500 20,000 (30,000) (3,175) 236,250 35,000 15,5002,000 20,000 30,000 30,000 3,175 5,3752,200 10,50010,500 21 Allowance for doubtful accounts 22 Accounts Payable 23 Deferred tax liability 24 Income Taxes Payable 25 Note Payable (long-term) 26 Accumulated Depreciation on Building 27 Accumulated Depreciation on Leased Asset 28 Lease obligation 29 Interest payable on lease obligation 30 Interest payable (Bonds) 31 Bonds payable 32 Billings on contruction in process 33 Pension liability 34 Convertible preferred stock, $100 par 35 Common Stock, $10 par 36 Additional Paid-in Capital 37 Unrealized Increase in Value of Marketable Securities 38Retained EarningS 4,500 87,500 210,000 3,300 9,000 6,000 (1,500) 1,000 3,500 9, 3,500 2,500 300 5,500 (3,500) (2,500) 3,000 18,000 5,500 3,500 2,500 3,000 18,000 1,800 45,000 150,000 325,000 150,000 400,000 18,000 1,800 1,800 45,000 175,000 100,000 350,000 45,000 175,000 250,000 (9,000) 10,500 5,000 300 124,130 9,000 9,000 14,000 24,500 8,700 13,700 1,500 1,800 297,325 421,455 10,500 300 650 124,780

75 Smart Construction Company 76 Statement of Cash Flows 77 For the Year ended June 30, 2017 78 79 Operating Activities 80 81 Adjustment for Non Cash items 82 83 84 85 Bad Debt(net of bad debts write back) 86 Net Income 124,780 Depreciation Expenses Loss on destruction of building Amortisation Discount on bond 3,000 Gain on conversion of preferred sotck Gain on repayment of Note Payable Share income from subsidiary Dividend Received from subsidiary Provison for Pension 45 3,500 (4,000) (1,000) (6,000) 2,000 350,000 89 90 91 Adjustment for change in working capital 92 93 94 95 Increase in Income Tax payable (including deferred tax) 96 97 98 99 Net cash Flow from Operating Activities 100 101 Investing Activities: 102 Marketable Security 103 Investment Long Term 104 Lease Equipment net of Leaase Obligation 105 Insurance proceeds on Building 106 Net cash flow from investing activities 107 108 Financing activiti 109 Common Stock issued including additional capital 110 Bond Payable 111 Dividend Paid 112 Net cash flow from Financing activities 113 114 Net change in cash 115 opening cash 116 Closing cash H Sheet1Sheet2 Sheet3 Increase In Accounts receivable Increase in Inventory net of billing in progress Decrease in prepaid expenses (30,000) (61,250) 35,000 10,975 Increase in Accounts payable Increase in interest payable Decrease in pension Liability 3,600 (100,000) 454,650 (1,300) (9,500) (2,000) 26,000 13,200 8,000 43,650 (650) 51,000 518,850 361,700 880,550