Question

1. From the Balance Sheet determine the increase or decrease in Cash during the year.

2 Complete the Statement of Cash Flows breaking down the Operating / Investing/Financing Activities.

Lucas Corporation reported the following income statement and comparative balance sheet, along with transaction data for 2015: Lucas Corporation Balance Sheet December 31, 20X1 and 2014 Assets 2015 2014 Liabilities 2015 2014 Current: Current: Cash and equivalents....... $19,000 $3,000 Accounts payable S 35,000 $ 26,000 Accounts receivable..... 22,000 23,000 Accrued liabilities..... 7.000 9,000 Inventories. 34.000 31.000 Income tax payable.... 10,000 10.000 Prepaid expenses............ 1.000 3,000 Total current liabilities 52,000 45,000 Total current assets...... 76,000 60,000 Long-term note payable... 44,000 Long-term investments......... 18,000 10,000 Bonds payable.............. 40.000 53.000 Equipment, net................. 67.000 52,000 Owners' Equity Patent, net... 44,000 10,000 Common stock............. 52,000 20,000 Retained earnings.......... 27,000 19,000 Less: Treasury stock..... (10.000) (5,000) Total assets............... $205,000 $132.000 Total liabilities and equity $205.000 $132.000 Lucas Corporation Income Statement Year Ended December 31, 2015 $662,000 560,000 102,000 ... .. $46,000 7,000 3,000 Sales revenue. Cost of Goods sold. Gross profit. Operating expenses Salary expenses.. Depreciation expense- equipment... Amortization expense- patent. Rent expense. Total operating expenses.... Income from operations.. Other items: Loss on sale of equipment... Income before income tax...... Income tax expense...... Net income.... 2,000 58,000 44,000 (2.000) 42,000 16,000 $ 26,000

Answer 1

1. Increase in cash = $ 19,000 - $ 3,000 = $ 16,000.

2.

Lucas Corporation Statement of Cash Flows For the year ended December 31, 2015
Cash Flows from Operating Activities
Net income		$ 26,000
Adjustments to reconcile net income to net cash from operations
Depreciation expense	$ 7,000
Amortization expense	3,000
Loss on sale of equipment	2,000
Decrease in accounts receivable	1,000
Increase in inventory	(3,000)
Decrease in prepaid expenses	2,000
Increase in accounts payable	9,000
Decrease in accrued liabilities	(2,000)	19,000
Net cash flows from Operating Activities		45,000
Cash Flows from Investing Activities
Cash from sale of equipment	74,000
Cash paid for purchase of equipment	(98,000)
Cash paid for purchase of long term investments	(8,000)
Net cash used for Investing Activities		(32,000)
Cash Flows from Financing Activities
Cash from issuance of common stock	32,000
Cash from issuance of long term notes payable	7,000
Cash paid to retire bonds payable	(13,000)
Cash paid for treasury stock	(5,000)
Cash paid for dividends	(18,000)
Net cash flows from Financing Activities		3,000
Net increase ( decrease) in cash and cash equivalents		16,000
Beginning cash and cash equivalents		3,000
Ending cash and cash equivalents		19,000