Locker Company’s income statement and comparative balance sheets follow.   During 2017, the company sold for $34,000 cash old equipment that had cost $72,000 and had $38,000 accumulated depreciation. Also in 2017, new equipment worth $120,000 was acquired in exchange for $120,000 of bonds payable, and bonds payable of $240,000 were retired for cash at a loss. A $52,000 cash dividend was declared and paid in 2017. Any stock issuances were for cash. Calculate Locker’s net cash flow from financing activities for 2017. a. ($250,000) b. ($254,000) c. $ 48,000 d. ($ 52,000)

FINANCIAL ACCOUNTING
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Chapter1: Financial Statements And Business Decisions
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Locker Company’s income statement and comparative balance sheets follow.

 

During 2017, the company sold for $34,000 cash old equipment that had cost $72,000 and had $38,000 accumulated depreciation. Also in 2017, new equipment worth $120,000 was acquired in exchange for $120,000 of bonds payable, and bonds payable of $240,000 were retired for cash at a loss. A $52,000 cash dividend was declared and paid in 2017. Any stock issuances were for cash.
Calculate Locker’s net cash flow from financing activities for 2017.
a. ($250,000)
b. ($254,000)
c. $ 48,000
d. ($ 52,000)

LOCKER COMPANY
Income Statement
For Year Ended December 31, 2017
Sales
$1,400,000
Cost of goods sold
$880,000
Wages and other operating expenses
190,000
Depreciation expense
44,000
Amortization expense
14,000
Interest expense
20,000
Income tax expense
72,000
Loss of bond retirement
10,000
1,230,000
Net income
$ 170,000
Transcribed Image Text:LOCKER COMPANY Income Statement For Year Ended December 31, 2017 Sales $1,400,000 Cost of goods sold $880,000 Wages and other operating expenses 190,000 Depreciation expense 44,000 Amortization expense 14,000 Interest expense 20,000 Income tax expense 72,000 Loss of bond retirement 10,000 1,230,000 Net income $ 170,000
LOCKER COMPANY
Balance Sheets
Dec. 31, 2017
Dec. 31, 2016
Assets
Cash
$ 54,000
$ 36,000
Accounts receivable
106,000
96,000
Inventory
206,000
218,000
Prepaid expenses
24,000
20,000
Plant assets
720,000
672,000
Accumulated depreciation
(174,000)
(168,000)
Intangible assets
86,000
100,000
Total assets
$1,022.000
$974.000
Liabilities and Stockholders' Equity
Accounts payable
Interest payable
$64,000
$52,000
8,000
14,000
Income tax payable
12,000
16,000
Bonds payable
120,000
240,000
Common stock
504,000
456,000
Retained earnings
314,000
196,000
Total liabilities and equity
$1,022,000
$974,000
Transcribed Image Text:LOCKER COMPANY Balance Sheets Dec. 31, 2017 Dec. 31, 2016 Assets Cash $ 54,000 $ 36,000 Accounts receivable 106,000 96,000 Inventory 206,000 218,000 Prepaid expenses 24,000 20,000 Plant assets 720,000 672,000 Accumulated depreciation (174,000) (168,000) Intangible assets 86,000 100,000 Total assets $1,022.000 $974.000 Liabilities and Stockholders' Equity Accounts payable Interest payable $64,000 $52,000 8,000 14,000 Income tax payable 12,000 16,000 Bonds payable 120,000 240,000 Common stock 504,000 456,000 Retained earnings 314,000 196,000 Total liabilities and equity $1,022,000 $974,000
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