Monday, 30 April 2018
Wednesday, 25 April 2018
The comparative balance sheet for Coastal Travel Services, Inc., for December 31, 2017 and 2016 , is as follows:
The comparative balance sheet for Coastal Travel Services, Inc., for December 31, 2017 and 2016 ,
is as follows:
Coastal Travel Services, Inc.
Comparative Balance Sheets
December 31, 2017 and 2016
Assets
2017
2016
Current assets:
Cash
$44,000
$17,000
Accounts receivable
80,000
85,000
Inventory
61,000
20,000
Prepaid insurance
8,000
16,000
Total current assets
$193,000
$138,000
Land
$108,000
$121,000
Equipment
80,000
58,000
Less: Accumulated depreciation
(16,000)
(11,000)
Total assets
$365,000
$306,000
Liabilities
Current liabilities:
Accounts payable
$30,000
$36,000
Wages payable
35,000
27,000
Interest payable
16,000
15,000
Income taxes payable
11,000
8,000
Total current liabilities
$92,000
$86,000
Notes payable (long-term)
100,000
91,000
Total liabilities
$192,000
$177,000
Stockholders' equity
Common stock
$136,000
$116,000
Retained earnings
37,000
13,000
Total stockholders' equity
$173,000
$129,000
Total liabilities and equity
$365,000
$306,000
The following information is taken from the records of Coastal Travel Services, Inc.:
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a.
|
Land was sold for $9,200.
|
|
b.
|
Equipment was purchased for cash.
|
|
c.
|
There were no disposals of equipment during the year.
|
|
d.
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The common stock was issued for cash.
|
|
e.
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Net income for 2017 was $32,000.
|
|
f.
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Cash dividends paid during the year were $8,000.
|
Prepare the statement of cash flows (indirect method) for Coastal Travel Services, Inc., for 2017.
Prepare the statement one section at a time. (Use parentheses or a minus sign for numbers to be subtracted and decreases in cash.)
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Coastal Travel Services, Inc.
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Statement of Cash Flows—Operating Activities Section (Indirect Method)
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For the Year Ended December 31, 2017
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||
|
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Operating Activities:
|
|
|
|
|
Net income
|
|
$32,000
|
|
|
Adjustments to reconcile net income to cash basis:
|
|
|
|
|
Loss on sale of land
|
$3,800
|
|
|
|
Depreciation expense
|
5,000
|
|
|
|
Decrease in accounts receivable
|
5,000
|
|
|
|
Increase in inventory
|
(41,000)
|
|
|
|
Decrease in prepaid insurance
|
8,000
|
|
|
|
Decrease in accounts payable
|
(6,000)
|
|
|
|
Increase in wages payable
|
8,000
|
|
|
|
Increase in interest payable
|
1,000
|
|
|
|
Increase in income taxes payable
|
3,000
|
(13,200)
|
|
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Net cash provided by (used for) operating activities
|
|
$18,800
|
The comparative balance sheet for Coastal Travel Services, Inc., for December 31, 2017 and 2016 , is as follows:
The comparative balance sheet for Coastal Travel Services, Inc., for December 31, 2017 and 2016 ,
is as follows:
Coastal Travel Services, Inc.
Comparative Balance Sheets
December 31, 2017 and 2016
Assets
2017
2016
Current assets:
Cash
$44,000
$17,000
Accounts receivable
80,000
85,000
Inventory
61,000
20,000
Prepaid insurance
8,000
16,000
Total current assets
$193,000
$138,000
Land
$108,000
$121,000
Equipment
80,000
58,000
Less: Accumulated depreciation
(16,000)
(11,000)
Total assets
$365,000
$306,000
Liabilities
Current liabilities:
Accounts payable
$30,000
$36,000
Wages payable
35,000
27,000
Interest payable
16,000
15,000
Income taxes payable
11,000
8,000
Total current liabilities
$92,000
$86,000
Notes payable (long-term)
100,000
91,000
Total liabilities
$192,000
$177,000
Stockholders' equity
Common stock
$136,000
$116,000
Retained earnings
37,000
13,000
Total stockholders' equity
$173,000
$129,000
Total liabilities and equity
$365,000
$306,000
The following information is taken from the records of Coastal Travel Services, Inc.:
|
a.
|
Land was sold for $9,200.
|
|
b.
|
Equipment was purchased for cash.
|
|
c.
|
There were no disposals of equipment during the year.
|
|
d.
|
The common stock was issued for cash.
|
|
e.
|
Net income for 2017 was $32,000.
|
|
f.
|
Cash dividends paid during the year were $8,000.
|
Prepare the statement of cash flows (indirect method) for Coastal Travel Services, Inc., for 2017.
Prepare the statement one section at a time. (Use parentheses or a minus sign for numbers to be subtracted and decreases in cash.)
|
|
Coastal Travel Services, Inc.
|
||||
|
|
Statement of Cash Flows—Operating Activities Section (Indirect Method)
|
||||
|
|
For the Year Ended December 31, 2017
|
||||
|
|
Operating Activities:
|
|
|
||
|
|
Net income
|
|
$32,000
|
||
|
|
Adjustments to reconcile net income to cash basis:
|
|
|
||
|
|
Loss on sale of land
|
$3,800
|
|
||
|
|
Depreciation expense
|
5,000
|
|
||
|
|
Decrease in accounts receivable
|
5,000
|
|
||
|
|
Increase in inventory
|
(41,000)
|
|
||
|
|
Decrease in prepaid insurance
|
8,000
|
|
||
|
|
Decrease in accounts payable
|
(6,000)
|
|
||
|
|
Increase in wages payable
|
8,000
|
|
||
|
|
Increase in interest payable
|
1,000
|
|
||
|
|
Increase in income taxes payable
|
3,000
|
(13,200)
|
||
|
|
Net cash provided by (used for) operating activities
|
|
$18,800
|
||
|
|
Investing Activities:
|
|
|
||
|
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Proceeds from the sale of land
|
9,200
|
|
||
|
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Cash used to purchase equipment
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(22,000)
|
|
||
|
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Net cash provided by (used for) investing activities
|
|
(12,800)
|
||
|
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Financing Activities:
|
|
|
|
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Proceeds from issuance of long term notes
|
9,000
|
|
|
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Dividends paid
|
(8,000)
|
|
|
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Issuance of stock for cash
|
20,000
|
|
|
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Net cash provided by (used for) financing activities
|
|
21,000
|
|
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Net increase (decrease) in cash
|
|
27,000
|
|
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Cash, beginning of the year
|
|
17,000
|
|
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Cash, end of the year
|
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$44,000
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EricsonCorporation has the following activities for the past year:
Ericson
Requirement
Prepare the operating
activities section of Ericson Corporation's statement of cash flows for the year ended December 31, using the indirect method for operating cash flows. (Use parentheses or a minus sign for numbers to be subtracted.)
Ericson Corporation
Statement of Cash Flows—Operating Activities Section (Indirect Method)
For the Year Ended December 31
Operating Activities:
Net income
$41,000
Adjustments to reconcile net income to cash basis
Depreciation expense
$20,000
Increase in current assets other than cash
(6,000)
Decrease in current liabilities
(9,000)
5,000
Net cash provided by (used for) operating activities
46,000
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