Comparative balance sheets for Hamilton Company are presented below. Hamilton Company Comparative Balance Sheet Decemebr 31 Assets 2017 2016 Cash 78000 12000 Accoutns Receivable 93000 76000 Inventory 180000 189000 Land 75000 100000 Equipemnt 250000 210000 Accu Dep - Equipment (66,000) (42,000) Total 610000 545000 Liability and Equity Accounts Payable 34000 47000 Bonds Payable 150000 200000 Common Stock ($1 Par ) 214000 164000 Retained Earnings 212000 134000 Total 610000 545000 Additional information: 1. Net income for 2017 was $134000 2. Cash dividends of $65,000 were declared and paid. 3. Bonds payable amounting to $50,000 were redeemed for cash $50,000. 4. Common stock was issued for $50,000 cash. 5. Depreciation expense was $24,000. 6. Sales revenue for the year was $978,000. 7. Land was sold at cost, and equipment was purchased for cash. Instructions a. Prepare a statement of cash flows for 2017 using the indirect method. b. Comment on the quality of income of the company. b. Comment on investing and financings cashflows of the company.

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

Related questions

Question

Comparative balance sheets for Hamilton Company are presented below.

	Hamilton Company
	Comparative Balance Sheet
	Decemebr 31
	Assets	2017	2016
	Cash	78000	12000
	Accoutns Receivable	93000	76000
	Inventory	180000	189000
	Land	75000	100000
	Equipemnt	250000	210000
	Accu Dep - Equipment	(66,000)	(42,000)
	Total	610000	545000

	Liability and Equity
	Accounts Payable	34000	47000
	Bonds Payable	150000	200000
	Common Stock ($1 Par )	214000	164000
	Retained Earnings	212000	134000
	Total	610000	545000

Additional information:
1. Net income for 2017 was $134000
2. Cash dividends of $65,000 were declared and paid.
3. Bonds payable amounting to $50,000 were redeemed for cash $50,000.
4. Common stock was issued for $50,000 cash.
5. Depreciation expense was $24,000.
6. Sales revenue for the year was $978,000.
7. Land was sold at cost, and equipment was purchased for cash.

Instructions
a. Prepare a statement of cash flows for 2017 using the indirect method.
b. Comment on the quality of income of the company.
b. Comment on investing and financings cashflows of the company.