Question

The following information relates to Walker Corporation for 19x7 and 1918. 1927 $ 54,060 480,000 340,000 15,000 80,000 300,000 700,000 340,000 $2.309.000 Change ($ 33,000) (59,000) (30,000) 2,620 50,000 (20,000) 180,000 $ 90.000 Walker Corporation Comparative Balance Sheets December 31, 19x8 and 19x7 Assets 1928 Cash $ 21,000 Accounts Receivable (net) 421,000 Inventory 310,000 Prepaid Expenses 17,000 Investments 80,000 Land 350,000 Building (net) 680,000 Equipment (net) 520,000 Total Assets $2,399.000 Liabilities Accounts Payable $ 328,000 Accrued Liabilities 171,000 Income Taxes Payable 22,000 Bonds Payable 410,000 Long-Term Note Payable 130,000 Total Liabilities $1,061,000 Stockholders' Equity Common Stock $ 800,000 Paid-in Capital in Excess of Par Value 152,000 Retained Earnings 386,000 Total Stockholders' Equity $1,338,000 Total Liabilities and Stockholders' Equity $2.399,000 $335,000 170,000 34,000 700,000 ($ 7,000) 1,000 (12,000) (290,000) 130,000 (5178,000) $1,239,000 $200,000 $ 600,30 152,000 318,000 $1,070,000 $2.309.000 68,000 $268,000 90.000 Additional information: Net income for 19x8 was $143,000 Issued a long-term note payable in exchange for computer equipment for $130,000 Purchased computer terminals for $90,000. Depreciation on equipment for 19x8 was $40,000 Depreciation on building for 19x8 was $20,000. Reacquired bonds payable at par for $290,000. Declared and paid dividends of $75,000 Issued 20.000 shares of common stock at par value of $10 per share. Paid 550.000 for land intended for a new plant site. Prepare a statement of cash flows using the indirect method. Include a schedule of noncash investing and financing transactions, if applicable.

Answer 1

$143,000 Walker Corporation Statement of Cash Flows For the Year Ended December 31, 19x8 Cash Flow from Operating Activities: Net Income Adjustments to reconcile net income to net cash provided by operating activities: Depreciation Expense-Equipment $40,000 Depreciation Expense-Building $20,000 Decrease in Accounts Receivables, net $59,000 Decrease in Inventory $30,000 Increase in Prepaid expenses -$2,000 Decrease in Accounts Payable -$7,000 Increase in Accrued Liabilities $1,000 Decrease in Income taxes payable $12,000 [Non-cash expense and so added back] [Non-cash expense and so added back] [Working capital is decreased and so positive] [Working capital is decreased and so positive] (Working capital is increased and so negative] [Working capital is increased and so negative] [Working capital is decreased and so positive] [Working capital is increased and so negative] $129,000 $272,000 Net Cash provided by operating activities Cash Flow from Investing Activities: Cash paid to purchase computer terminals Cash paid to purchase land Net Cash used in investing activities -$90,000 -$50,000 -$140,000

$200,000 $290,000 $75,000 Cash Flow from Financing Activities: Cash realized from new common stock Cash used to retire bonds payable Cash dividends paid during the year Net Cash used in financing activities Net Decrease in cash balance during the year Add: Beginning cash balance Ending Cash Balance $ 165,000 $33,000 $54,000 $21,000 Non-cash investing and financing activities: Long-term note payable issued for purchasing computer equipment $130,000