Diane's balance sheets as of December 31, 2016 and 2017 are presented below: 2016 310,000 300,000 0 2017 $443,456 430,000 100,000 17,356) 950,000 ( 318.100) $1.588.000 Cash Accounts receivable, net Long-term notes receivable Discount on long-term notes receivable Property, plant, and equipment at cost Accumulated depreciation 0) 750,000 325,000) $1035.000 TOTAL ASSETS 230,000 220,000 25,000 60,000 200,000 300,000 $1035.000 $175,000 310,000 15,000 110,000 315,000 663,000 $1.588.000 Accrued liabilities Unearned revenues Short-term debt Common stock, $1 par value Additional paid-in-capital Retained earnings TOTAL LIABILITIES & SE Diane's 2017 income statement is presented below: Service revenues Other revenues and gains/losses, net Selling, general, and administrative expenses Interest expense $1,800,000 1,987 1,209,000 1,000 588,013 125,013 463.000 Income before income taxes Income tax expense Net income SELECTED OTHER INFORMATION: 1 On January 1,2017, Diane provided services to a customer in exchange for a $100,000, zero interest bearing note receivable. Diane will collect the note principal in full on January 1, 2020. The market rate of interest at the time of the sale was 10% 2 During 2017, all other services provided by Diane were on a cash or short-term credit (AR) basis. 3. ributed a cash dividend During 2017, Diane declared and During 2017, Diane issued, in exchange for cash, 50,000 additional shares of her common stock 4 5 During 2017, Diane both bought and sold some PP&E. Diane uses the straight-line depreciation method on all of its PP&E items and calculates depreciation to the nearest full-month. Diane assumes a $0 salvage value on each PP&E item. Diane's PP&E sales related to two items: A machine. Diane purchased the machine on 06-01-14 for $86,400. The machine had an eight-year useful life. Diane sold the machine on 11-01-17 for $45,000. A building. When Diane purchased the building, she paid $100,000. Diane sold the building for $20,000. As a result of the sale, Diane recorded a loss of $5,000 а. b. During 2017, Diane did NOT enter into any non-cash investing or financing activities 6 Prepare Diane's Statement of Cash Flows (in good form) for the year ended December 31, 2017. Diane uses the indirect method.

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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Diane's balance sheets as of December 31, 2016 and 2017 are presented below:
2016
310,000
300,000
0
2017
$443,456
430,000
100,000
17,356)
950,000
( 318.100)
$1.588.000
Cash
Accounts receivable, net
Long-term notes receivable
Discount on long-term notes receivable
Property, plant, and equipment at cost
Accumulated depreciation
0)
750,000
325,000)
$1035.000
TOTAL ASSETS
230,000
220,000
25,000
60,000
200,000
300,000
$1035.000
$175,000
310,000
15,000
110,000
315,000
663,000
$1.588.000
Accrued liabilities
Unearned revenues
Short-term debt
Common stock, $1 par value
Additional paid-in-capital
Retained earnings
TOTAL LIABILITIES & SE
Diane's 2017 income statement is presented below:
Service revenues
Other revenues and gains/losses, net
Selling, general, and administrative expenses
Interest expense
$1,800,000
1,987
1,209,000
1,000
588,013
125,013
463.000
Income before income taxes
Income tax expense
Net income
SELECTED OTHER INFORMATION:
1
On January 1,2017, Diane provided services to a customer in exchange for a $100,000, zero interest bearing note
receivable. Diane will collect the note principal in full on January 1, 2020. The market rate of interest at the time of the sale
was 10%
2
During 2017, all other services provided by Diane were on a cash or short-term credit (AR) basis.
3.
ributed a cash dividend
During 2017, Diane declared and
During 2017, Diane issued, in exchange for cash, 50,000 additional shares of her common stock
4
5
During 2017, Diane both bought and sold some PP&E. Diane uses the straight-line depreciation method on all of its PP&E
items and calculates depreciation to the nearest full-month. Diane assumes a $0 salvage value on each PP&E item. Diane's
PP&E sales related to two items:
A machine. Diane purchased the machine on 06-01-14 for $86,400. The machine had an eight-year useful life.
Diane sold the machine on 11-01-17 for $45,000.
A building. When Diane purchased the building, she paid $100,000. Diane sold the building for $20,000. As a
result of the sale, Diane recorded a loss of $5,000
а.
b.
During 2017, Diane did NOT enter into any non-cash investing or financing activities
6
Prepare Diane's Statement of Cash Flows (in good form) for the year ended December 31, 2017. Diane uses the indirect method.
Transcribed Image Text:Diane's balance sheets as of December 31, 2016 and 2017 are presented below: 2016 310,000 300,000 0 2017 $443,456 430,000 100,000 17,356) 950,000 ( 318.100) $1.588.000 Cash Accounts receivable, net Long-term notes receivable Discount on long-term notes receivable Property, plant, and equipment at cost Accumulated depreciation 0) 750,000 325,000) $1035.000 TOTAL ASSETS 230,000 220,000 25,000 60,000 200,000 300,000 $1035.000 $175,000 310,000 15,000 110,000 315,000 663,000 $1.588.000 Accrued liabilities Unearned revenues Short-term debt Common stock, $1 par value Additional paid-in-capital Retained earnings TOTAL LIABILITIES & SE Diane's 2017 income statement is presented below: Service revenues Other revenues and gains/losses, net Selling, general, and administrative expenses Interest expense $1,800,000 1,987 1,209,000 1,000 588,013 125,013 463.000 Income before income taxes Income tax expense Net income SELECTED OTHER INFORMATION: 1 On January 1,2017, Diane provided services to a customer in exchange for a $100,000, zero interest bearing note receivable. Diane will collect the note principal in full on January 1, 2020. The market rate of interest at the time of the sale was 10% 2 During 2017, all other services provided by Diane were on a cash or short-term credit (AR) basis. 3. ributed a cash dividend During 2017, Diane declared and During 2017, Diane issued, in exchange for cash, 50,000 additional shares of her common stock 4 5 During 2017, Diane both bought and sold some PP&E. Diane uses the straight-line depreciation method on all of its PP&E items and calculates depreciation to the nearest full-month. Diane assumes a $0 salvage value on each PP&E item. Diane's PP&E sales related to two items: A machine. Diane purchased the machine on 06-01-14 for $86,400. The machine had an eight-year useful life. Diane sold the machine on 11-01-17 for $45,000. A building. When Diane purchased the building, she paid $100,000. Diane sold the building for $20,000. As a result of the sale, Diane recorded a loss of $5,000 а. b. During 2017, Diane did NOT enter into any non-cash investing or financing activities 6 Prepare Diane's Statement of Cash Flows (in good form) for the year ended December 31, 2017. Diane uses the indirect method.
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