Question

Problem 13-24 Blake Weaver, Crane Enterprises' controller, is preparing the financial statements for 2016. He has completed the comparative balance sheets and income statement, which follow, and has gathered this additional information: • On December 31, 2016, Crane sold a piece of equipment with an original cost of $25,060 for $30,190 cash. The equipment had a book value of $13,230. On February 1, 2016, Crane issued $105,960 of common stock to raise cash in anticipation of the purchase of a new building later in the year. On February 2, 2016, Crane took out a ten-year $76,230 long-term loan to provide the remaining funds needed to purchase the building. On May 15, 2016, Crane paid $156,830 for the new building. The company repaid $4,600 of the long-term debt before the end of the year. • • Crane Enterprises Income Statement For the Year Ended December 31, 2016 Sales revenue $ 1,076,900 Gain on equipment sale 16,960 Total revenue 1,093,860 Cost of goods sold 703,300 Operating expenses Depreciation expense $ 30,750 Interest expense 7,600 Wages expenses 175,640 Other expenses 16,460 230,450 Income before taxes 160,110 Tax expense 64,000 Net income $ 96,110

Answer 1

UN $ 96,110 Crane Enterprises Statement of Cash Flows For the Year Ended December 31, 2016 4 Cash flow from operating activities: 5 Net Income 6 Adjustment to net income: 7 Depreciation $ 30,750 8 Gain on sale of equipment $ -16,960 9 Increase in accounts receivable $ 18,050 10 Increase in inventory $ -29,960 11 Decrease in accounts payable $ -24,380 12 Decrease in taxes payable $ -4,160 $ -62,760 $ 33,350 14 Net cash provided by operating activities כו $ 30,190 $ -156,830 $ -126,640 16 Cash flow from investing activities: 17 Sale of equipment 18 Purchase of building 19 Net cash used by investing activities 20 21 Cash flow from financing activities: 22 Proceeds from issuance of common stock 23 Proceeds from mortgage payable 24 Repayment of long-term debt 25 Net cash provided by financing activities $ 105,960 $ 76,230 $ 4,600 $ 177,590 27 Change in cash 28 Cash, Beginning balance 29 Cash, Ending balance $ 84,300 $ 44,600 $ 128,900

B 2 96110 А 1 Crane Enterprises S tatement of Cash Flows 3 For the Year Ended December 31, 2016 4 Cash flow from operating activities: 5 Net Income 6 Adjustment to net income: 7 Depreciation 30750 8 Gain on sale of equipment --(30190-13230) 9 Increase in accounts receivable =270300-288350 10 Increase in inventory =95240-125200 11 Decrease in accounts payable =151290-175670 12 Decrease in taxes payable =17600-21760 13 =SUM(B7:B12) +CD+C13 14 Net cash provided by operating activities 13 =+B17+B18 16 Cash flow from investing activities: 17 Sale of equipment 30190 18 Purchase of building -156830 19 Net cash used by investing activities 20 21 Cash flow from financing activities: 22 Proceeds from issuance of common stock (105960 23 Proceeds from mortgage payable 76230 24 Repayment of long-term debt -4600 25 Net cash provided by financing activities 26 27 Change in cash 28 Cash, Beginning balance 29 Cash, Ending balance =+B22+B24+B23 =+C14+C19+C25 44600 =+C27+C28