The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is as follows: 1 Dec. 31, 20Y3 Dec. 31, 20Y2 2 Assets 3 Cash $155,000.00 $150,000.00 4 Accounts receivable (net) 450,000.00 400,000.00 5 Inventories 770,000.00 750,000.00 6 Investments 0.00 100,000.00 7 Land 500,000.00 0.00 8 Equipment 1,400,000.00 1,200,000.00 9 Accumulated depreciation-equipment (600,000.00) (500,000.00) 10 Total assets $2,675,000.00 $2,100,000.00 11 Liabilities and Stockholders’ Equity 12 Accounts payable (merchandise creditors) $340,000.00 $300,000.00 13 Accrued expenses payable (operating expenses) 45,000.00 50,000.00 14 Dividends payable 30,000.00 25,000.00 15 Common stock, $4 par 700,000.00 600,000.00 16 Paid-in capital in excess of par—common stock 200,000.00 175,000.00 17 Retained earnings 1,360,000.00 950,000.00 18 Total liabilities and stockholders’ equity $2,675,000.00 $2,100,000.00 The income statement for the year ended December 31, 20Y3, is as follows: 1 Sales $3,000,000.00 2 Cost of goods sold (1,400,000.00) 3 Gross profit $1,600,000.00 4 Operating expenses: 5 Depreciation expense $100,000.00 6 Other operating expenses 950,000.00 7 Total operating expenses (1,050,000.00) 8 Operating income $550,000.00 9 Other income: 10 Gain on sale of investments 75,000.00 11 Income before income tax $625,000.00 12 Income tax expense (125,000.00) 13 Net income $500,000.00 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: a. The investments were sold for $175,000 cash. b. Equipment and land were acquired for cash. c. There were no disposals of equipment during the year. d. The common stock was issued for cash. e. There was a $90,000 debit to Retained Earnings for cash dividends declared. Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.
The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is as follows: 1 Dec. 31, 20Y3 Dec. 31, 20Y2 2 Assets 3 Cash $155,000.00 $150,000.00 4 Accounts receivable (net) 450,000.00 400,000.00 5 Inventories 770,000.00 750,000.00 6 Investments 0.00 100,000.00 7 Land 500,000.00 0.00 8 Equipment 1,400,000.00 1,200,000.00 9 Accumulated depreciation-equipment (600,000.00) (500,000.00) 10 Total assets $2,675,000.00 $2,100,000.00 11 Liabilities and Stockholders’ Equity 12 Accounts payable (merchandise creditors) $340,000.00 $300,000.00 13 Accrued expenses payable (operating expenses) 45,000.00 50,000.00 14 Dividends payable 30,000.00 25,000.00 15 Common stock, $4 par 700,000.00 600,000.00 16 Paid-in capital in excess of par—common stock 200,000.00 175,000.00 17 Retained earnings 1,360,000.00 950,000.00 18 Total liabilities and stockholders’ equity $2,675,000.00 $2,100,000.00 The income statement for the year ended December 31, 20Y3, is as follows: 1 Sales $3,000,000.00 2 Cost of goods sold (1,400,000.00) 3 Gross profit $1,600,000.00 4 Operating expenses: 5 Depreciation expense $100,000.00 6 Other operating expenses 950,000.00 7 Total operating expenses (1,050,000.00) 8 Operating income $550,000.00 9 Other income: 10 Gain on sale of investments 75,000.00 11 Income before income tax $625,000.00 12 Income tax expense (125,000.00) 13 Net income $500,000.00 Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows: a. The investments were sold for $175,000 cash. b. Equipment and land were acquired for cash. c. There were no disposals of equipment during the year. d. The common stock was issued for cash. e. There was a $90,000 debit to Retained Earnings for cash dividends declared. Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.
Managerial Accounting
15th Edition
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:Carl Warren, Ph.d. Cma William B. Tayler
Chapter16: Financial Statement Analysis
Section: Chapter Questions
Problem 4PB
Related questions
Question
The comparative balance sheet of Livers Inc. for December 31, 20Y3 and 20Y2, is as follows:
1
|
|
Dec. 31, 20Y3
|
Dec. 31, 20Y2
|
2
|
Assets
|
|
|
3
|
Cash
|
$155,000.00
|
$150,000.00
|
4
|
Accounts receivable (net)
|
450,000.00
|
400,000.00
|
5
|
Inventories
|
770,000.00
|
750,000.00
|
6
|
Investments
|
0.00
|
100,000.00
|
7
|
Land
|
500,000.00
|
0.00
|
8
|
Equipment
|
1,400,000.00
|
1,200,000.00
|
9
|
|
(600,000.00)
|
(500,000.00)
|
10
|
Total assets
|
$2,675,000.00
|
$2,100,000.00
|
11
|
Liabilities and
|
|
|
12
|
Accounts payable (merchandise creditors)
|
$340,000.00
|
$300,000.00
|
13
|
Accrued expenses payable (operating expenses)
|
45,000.00
|
50,000.00
|
14
|
Dividends payable
|
30,000.00
|
25,000.00
|
15
|
Common stock, $4 par
|
700,000.00
|
600,000.00
|
16
|
Paid-in capital in excess of par—common stock
|
200,000.00
|
175,000.00
|
17
|
|
1,360,000.00
|
950,000.00
|
18
|
Total liabilities and stockholders’ equity
|
$2,675,000.00
|
$2,100,000.00
|
The income statement for the year ended December 31, 20Y3, is as follows:
1
|
Sales
|
|
$3,000,000.00
|
2
|
Cost of goods sold
|
|
(1,400,000.00)
|
3
|
Gross profit
|
|
$1,600,000.00
|
4
|
Operating expenses:
|
|
|
5
|
Depreciation expense
|
$100,000.00
|
|
6
|
Other operating expenses
|
950,000.00
|
|
7
|
Total operating expenses
|
|
(1,050,000.00)
|
8
|
Operating income
|
|
$550,000.00
|
9
|
Other income:
|
|
|
10
|
Gain on sale of investments
|
|
75,000.00
|
11
|
Income before income tax
|
|
$625,000.00
|
12
|
Income tax expense
|
|
(125,000.00)
|
13
|
Net income
|
|
$500,000.00
|
Additional data obtained from an examination of the accounts in the ledger for 20Y3 are as follows:
a. The investments were sold for $175,000 cash. | |
b. Equipment and land were acquired for cash. | |
c. There were no disposals of equipment during the year. | |
d. The common stock was issued for cash. | |
e. There was a $90,000 debit to Retained Earnings for cash dividends declared. |
Prepare a statement of cash flows, using the direct method of presenting cash flows from operating activities. Be sure to complete the heading of the statement. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Enter amounts that represent cash outflows as negative numbers using a minus sign.
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 2 images
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Follow-up Questions
Read through expert solutions to related follow-up questions below.
Follow-up Question
How did you get Cash Received from Sale of Common stock
Solution
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Recommended textbooks for you
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub
![Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781337912020/9781337912020_smallCoverImage.jpg)
Managerial Accounting
Accounting
ISBN:
9781337912020
Author:
Carl Warren, Ph.d. Cma William B. Tayler
Publisher:
South-Western College Pub