The XYZ Corporation reported the following balance sheet data for 2018 and 2017: ​ 2018 2017 Cash $60,375 $22,955 Available-for-sale debt securities ​ ​ (not cash equivalents) 15,500 85,000 Accounts receivable 91,000 68,250 Inventory 165,000 145,000 Prepaid insurance 1,500 2,000 Land, buildings, and equipment 1,260,000 1,125,000 Accumulated depreciation (610,000) (572,000) Total assets $983,375 $876,205 Accounts payable $70,340 $148,670 Salaries payable 20,000 24,500 Notes payable (current) 25,000 75,000 Bonds payable 200,000 0 Common stock 300,000 300,000 Retained earnings 368,035 328,035 Total liabilities and shareholders' equity $983,375 $876,205 Additional information for 2018: (1.) Sold available-for-sale debt securities costing $69,500 for $74,000. (2.) Equipment costing $20,000 with a book value of $5,000 was sold for $6,000. (3.) Issued 6% bonds payable at face value, $200,000. (4.) Purchased new equipment for $155,000 cash. (5.) Paid cash dividends of $20,000. (6.) Net income was $60,000. Required: Prepare a statement of cash flows for 2018 in good form using the indirect method for cash flows from operating activities

Respuesta :

Answer:

Dividends actually paid is $10000 as per the reconciliationshown in the entry below (attachment)

Ver imagen igeclement43
Zviko

Answer:

statement of cash flows for 2018 using the indirect method

Cash Flow from Operating Activities

Net income for the year                                                     $60,000

Adjustment of Non-Cash Items :

Profit from Sale of Equipment                                              ($1,000)

Depreciation (Workings)                                                    $107,500

Adjustments for Working Capital items :

Increase in Accounts receivable                                       ($22,750)

Increase in Inventory                                                         ($20,000)

Decrease in Prepaid insurance                                               $500

Decrease in Accounts Payable                                          ($78,330)

Decrease in Salaries payable                                              ($4,500)

Decrease in Notes payable                                               ($50,000)

Cash Flow from Investing Activities

Proceeds from Sale of Equipment                                      $6,000

Purchase of New Equipment                                          ($155,000)

Cash Flow from Financing  Activities

Proceeds from Issue of 6% bonds                                  $200,000

Dividends Paid                                                                  ($20,000)

Proceeds from Available-for-sale debt securities            $74,000

Net Cash Inflow / Outflow during the Period                   $37,420

Cash and Cash Equivalents at Beginning of the Period $22,955

Cash and Cash Equivalents at End of the Period            $60,375

Explanation:

Available-for-sale debt securities - T- Account

Debit :

Ending Balance        15,500

Sale                          69,500

Totals                       85,000

Credit:

Beginning Balance 85,000

Totals                       85,000

Equipment T - Account

Debit :

Beginning Balance        1,125,000

Purchase                          155,000

Totals                             1,280,000

Credit:

Ending Balance            1,260,000

Sold                                   20,000

Totals                            1,280,000

Accumulated Depreciation Equipment T - Account

Debit :

Ending Balance        610,000

Disposal                      69,500

Totals                        679,500

Credit:

Beginning Balance  572,000

Depreciation             107,500

Totals                       679,500