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Dec. 31,20Y8 Dec. 31, 20Y7 Assets $ 80,000 $ 100,000 Cash ... Accounts receivable (net). 275,000 300,000 Merchandise inventory . Prepaid expenses 510,000 400,000 15,000 10,000 1,070,000 750,000 Equipment.... Accumulated depreciation-equipment Total assets .... (160,000) $1,400,000 (200,000) $1,750,000 Dec. 31, 20Y8 Dec. 31, 20Y7 Liabilities and Stockholders' Equity $ 100,000 $ 90,000 Accounts payable (merchandise creditors) Mortgage note payable.... Common stock, $10 par.. Paid-in capital: Excess of issue price over par-common stock..... Retained earnings...... ... 400,000 600,000 200,000 300,000 100,000 750,000 610,000 Total liabilities and stockholders'equity..... $1,750,000 $1.400,000

Dec. 31,20Y8 Dec. 31, 20Y7 Assets $ 80,000 $ 100,000 Cash ... Accounts receivable (net). 275,000 300,000 Merchandise inventory . Prepaid expenses 510,000 400,000 15,000 10,000 1,070,000 750,000 Equipment.... Accumulated depreciation-equipment Total assets .... (160,000) $1,400,000 (200,000) $1,750,000 Dec. 31, 20Y8 Dec. 31, 20Y7 Liabilities and Stockholders' Equity $ 100,000 $ 90,000 Accounts payable (merchandise creditors) Mortgage note payable.... Common stock, $10 par.. Paid-in capital: Excess of issue price over par-common stock..... Retained earnings...... ... 400,000 600,000 200,000 300,000 100,000 750,000 610,000 Total liabilities and stockholders'equity..... $1,750,000 $1.400,000

FINANCIAL ACCOUNTING
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

The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows:

Please see  the attachment for details:

Additional data obtained from the income statement and from an examination of the accounts in the ledger for 20Y8 are as follows:
a. Net income, $190,000.
b. Depreciation reported on the income statement, $115,000.
c. Equipment was purchased at a cost of $395,000, and fully depreciated equipment costing $75,000 was discarded, with no salvage realized.
d. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.
e. 40,000 shares of common stock were issued at $15 for cash.
f. Cash dividends declared and paid, $50,000.

Instructions
Prepare a statement of cash flows, using the indirect method.

Dec. 31,20Y8 Dec. 31, 20Y7 Assets $ 80,000 $ 100,000 Cash ... Accounts receivable (net). 275,000 300,000 Merchandise inventory . Prepaid expenses 510,000 400,000 15,000 10,000 1,070,000 750,000 Equipment.... Accumulated depreciation-equipment Total assets .... (160,000) $1,400,000 (200,000) $1,750,000
Transcribed Image Text:Dec. 31,20Y8 Dec. 31, 20Y7 Assets $ 80,000 $ 100,000 Cash ... Accounts receivable (net). 275,000 300,000 Merchandise inventory . Prepaid expenses 510,000 400,000 15,000 10,000 1,070,000 750,000 Equipment.... Accumulated depreciation-equipment Total assets .... (160,000) $1,400,000 (200,000) $1,750,000
Dec. 31, 20Y8 Dec. 31, 20Y7 Liabilities and Stockholders' Equity $ 100,000 $ 90,000 Accounts payable (merchandise creditors) Mortgage note payable.... Common stock, $10 par.. Paid-in capital: Excess of issue price over par-common stock..... Retained earnings...... ... 400,000 600,000 200,000 300,000 100,000 750,000 610,000 Total liabilities and stockholders'equity..... $1,750,000 $1.400,000
Transcribed Image Text:Dec. 31, 20Y8 Dec. 31, 20Y7 Liabilities and Stockholders' Equity $ 100,000 $ 90,000 Accounts payable (merchandise creditors) Mortgage note payable.... Common stock, $10 par.. Paid-in capital: Excess of issue price over par-common stock..... Retained earnings...... ... 400,000 600,000 200,000 300,000 100,000 750,000 610,000 Total liabilities and stockholders'equity..... $1,750,000 $1.400,000
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