Condensed comparative balance sheets of Breach Company at December 31, Years 1 and 2, are as follows: Year 2 Year 1 Cash $170,000 $74,000 Accounts receivable (net) 78,000 85,000 Inventories 106,500 90,000 Equipment 395,000 370,000 Accumulated depreciation (195,000) (158,000) Total assets $554,500 $461,000 Accounts payable (merchandise creditors) $51,000 $50,000 Taxes payable 2,500 5,000 Common stock, $10 par 262,000 230,000 Retained earnings 239,000 176,000 Total liabilities and stockholders' equity $554,500 $461,000 In addition, assume: • Equipment costing $25,000 was purchased for cash and no long-term assets were sold during the period. • Stock was issued for cash—3,200 shares at par. • Net income for the current year was $76,000. • Cash dividends declared and paid were $13,000. Prepare a statement of cash flows for the year ended December 31, Year 2, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments. Breach CompanyStatement of Cash FlowsFor the Year Ended December 31, Year 2 Cash flows from (used for) operating activities: $- Select - Adjustments to reconcile net income to net cash flows from (used for) operating activities: blank blank - Select - Changes in current operating assets and liabilities: blank blank - Select - - Select - blank - Select - - Select - blank $- Select - Cash flows from (used for) investing activities: $- Select - - Select - Cash flows from (used for) financing activities: $- Select - - Select - - Select - $- Select - Cash balance, January 1, Year 2 fill in the blank 27 Cash balance December 31, Year 2 $fill in the blank 28

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Question

Condensed comparative balance sheets of Breach Company at December 31, Years 1 and 2, are as follows:

	Year 2	Year 1
Cash	$170,000	$74,000
Accounts receivable (net)	78,000	85,000
Inventories	106,500	90,000
Equipment	395,000	370,000
Accumulated depreciation	(195,000)	(158,000)
Total assets	$554,500	$461,000

Accounts payable (merchandise creditors)	$51,000	$50,000
Taxes payable	2,500	5,000
Common stock, $10 par	262,000	230,000
Retained earnings	239,000	176,000
Total liabilities and stockholders' equity	$554,500	$461,000

In addition, assume:

• Equipment costing $25,000 was purchased for cash and no long-term assets were sold during the period.

• Stock was issued for cash—3,200 shares at par.

• Net income for the current year was $76,000.

• Cash dividends declared and paid were $13,000.

Prepare a statement of cash flows for the year ended December 31, Year 2, using the indirect method. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

Breach CompanyStatement of Cash FlowsFor the Year Ended December 31, Year 2

Cash flows from (used for) operating activities:
	$- Select -
Adjustments to reconcile net income to net cash flows from (used for) operating activities:	blank	blank
	- Select -
Changes in current operating assets and liabilities:	blank	blank
	- Select -
	- Select -	blank
	- Select -
	- Select -	blank
		$- Select -
Cash flows from (used for) investing activities:
	$- Select -
		- Select -
Cash flows from (used for) financing activities:
	$- Select -
	- Select -
		- Select -
		$- Select -
Cash balance, January 1, Year 2		fill in the blank 27
Cash balance December 31, Year 2		$fill in the blank 28