Statement of Cash Flows The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash $ 612,820 $ 661,020 Accounts receivable (net) 557,670 508,640 Inventories 845,690 778,280 Prepaid expenses 19,610 23,290 Land 210,810 318,670 Buildings 974,380 600,560 Accumulated depreciation-buildings (275,770) (257,380) Equipment 343,180 303,350 Accumulated depreciation-equipment (94,370) (106,020) Total assets $3,194,020 $2,830,410 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $ 606,860 $ 640,400 Bonds payable 178,870 0 Common stock, $20 par 210,000 78,000 Excess of paid-in capital over par 505,000 373,000 Retained earnings 1,693,290 1,739,010 Total liabilities and stockholders’ equity $3,194,020 $2,830,410 The noncurrent asset, noncurrent liability, and stockholders' equity accounts for 20Y2 are as follows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 318,670 Apr. 20 Realized $100,300 cash from sale 107,860 210,810 ACCOUNT Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 600,560 Apr. 20 Acquired for cash 373,820 974,380 ACCOUNT Accumulated Depreciation-Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 257,380 Dec. 31 Depreciation for year 18,390 275,770 ACCOUNT Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 303,350 Jan. 26 Discarded, no salvage 33,400 269,950 Aug. 11 Purchased for cash 73,230 343,180 ACCOUNT Accumulated Depreciation-Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 106,020 Jan. 26 Equipment discarded 33,400 72,620 Dec. 31 Depreciation for year 21,750 94,370 ACCOUNT Bonds Payable ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 May 1 Issued 10-year bonds 178,870 178,870 ACCOUNT Common Stock, $20 par ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 78,000 Dec. 7 Issued 6,600 shares of common stock for $40 per share 132,000 210,000 ACCOUNT Paid-in Capital in Excess of Par-Common Stock ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 373,000 Dec. 7 Issued 6,600 shares of common stock for $40 per share 132,000 505,000 ACCOUNT Retained Earnings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 1,739,010 Dec. 31 Net loss 22,010 1,717,000 Dec. 31 Cash dividends 23,710 1,693,290 Required: Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Whitman Co. Statement of Cash Flows For the Year Ended December 31, 20Y2 Cash flows from (used for) operating activities: $fill in the blank 2 Adjustments to reconcile net loss to net cash flows from (used for) operating activities: fill in the blank 4 fill in the blank 6 Changes in current operating assets and liabilities: fill in the blank 8 fill in the blank 10 fill in the blank 12 fill in the blank 14 Net cash flows used for operating activities $fill in the blank 15 Cash flows from (used for) investing activities: $fill in the blank 17 fill in the blank 19 fill in the blank 21 Net cash flows used for investing activities fill in the blank 22 Cash flows from (used for) financing activities: $fill in the blank 24 fill in the blank 26 fill in the blank 28 Net cash flows from financing activities fill in the blank 29 $fill in the blank 31 Cash balance, January 1, 20Y2 fill in the blank 32 Cash balance, December 31, 20Y2 $fill in the blank 33
Statement of Cash Flows The comparative balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows: Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash $ 612,820 $ 661,020 Accounts receivable (net) 557,670 508,640 Inventories 845,690 778,280 Prepaid expenses 19,610 23,290 Land 210,810 318,670 Buildings 974,380 600,560 Accumulated depreciation-buildings (275,770) (257,380) Equipment 343,180 303,350 Accumulated depreciation-equipment (94,370) (106,020) Total assets $3,194,020 $2,830,410 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $ 606,860 $ 640,400 Bonds payable 178,870 0 Common stock, $20 par 210,000 78,000 Excess of paid-in capital over par 505,000 373,000 Retained earnings 1,693,290 1,739,010 Total liabilities and stockholders’ equity $3,194,020 $2,830,410 The noncurrent asset, noncurrent liability, and stockholders' equity accounts for 20Y2 are as follows: ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 318,670 Apr. 20 Realized $100,300 cash from sale 107,860 210,810 ACCOUNT Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 600,560 Apr. 20 Acquired for cash 373,820 974,380 ACCOUNT Accumulated Depreciation-Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 257,380 Dec. 31 Depreciation for year 18,390 275,770 ACCOUNT Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 303,350 Jan. 26 Discarded, no salvage 33,400 269,950 Aug. 11 Purchased for cash 73,230 343,180 ACCOUNT Accumulated Depreciation-Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 106,020 Jan. 26 Equipment discarded 33,400 72,620 Dec. 31 Depreciation for year 21,750 94,370 ACCOUNT Bonds Payable ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 May 1 Issued 10-year bonds 178,870 178,870 ACCOUNT Common Stock, $20 par ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 78,000 Dec. 7 Issued 6,600 shares of common stock for $40 per share 132,000 210,000 ACCOUNT Paid-in Capital in Excess of Par-Common Stock ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 373,000 Dec. 7 Issued 6,600 shares of common stock for $40 per share 132,000 505,000 ACCOUNT Retained Earnings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 1,739,010 Dec. 31 Net loss 22,010 1,717,000 Dec. 31 Cash dividends 23,710 1,693,290 Required: Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Use the minus sign to indicate cash outflows, cash payments, decreases in cash, or any negative adjustments. Whitman Co. Statement of Cash Flows For the Year Ended December 31, 20Y2 Cash flows from (used for) operating activities: $fill in the blank 2 Adjustments to reconcile net loss to net cash flows from (used for) operating activities: fill in the blank 4 fill in the blank 6 Changes in current operating assets and liabilities: fill in the blank 8 fill in the blank 10 fill in the blank 12 fill in the blank 14 Net cash flows used for operating activities $fill in the blank 15 Cash flows from (used for) investing activities: $fill in the blank 17 fill in the blank 19 fill in the blank 21 Net cash flows used for investing activities fill in the blank 22 Cash flows from (used for) financing activities: $fill in the blank 24 fill in the blank 26 fill in the blank 28 Net cash flows from financing activities fill in the blank 29 $fill in the blank 31 Cash balance, January 1, 20Y2 fill in the blank 32 Cash balance, December 31, 20Y2 $fill in the blank 33
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Concept explainers
Reporting Cash Flows
Reporting of cash flows means a statement of cash flow which is a financial statement. A cash flow statement is prepared by gathering all the data regarding inflows and outflows of a company. The cash flow statement includes cash inflows and outflows from various activities such as operating, financing, and investment. Reporting this statement is important because it is the main financial statement of the company.
Balance Sheet
A balance sheet is an integral part of the set of financial statements of an organization that reports the assets, liabilities, equity (shareholding) capital, other short and long-term debts, along with other related items. A balance sheet is one of the most critical measures of the financial performance and position of the company, and as the name suggests, the statement must balance the assets against the liabilities and equity. The assets are what the company owns, and the liabilities represent what the company owes. Equity represents the amount invested in the business, either by the promoters of the company or by external shareholders. The total assets must match total liabilities plus equity.
Financial Statements
Financial statements are written records of an organization which provide a true and real picture of business activities. It shows the financial position and the operating performance of the company. It is prepared at the end of every financial cycle. It includes three main components that are balance sheet, income statement and cash flow statement.
Owner's Capital
Before we begin to understand what Owner’s capital is and what Equity financing is to an organization, it is important to understand some basic accounting terminologies. A double-entry bookkeeping system Normal account balances are those which are expected to have either a debit balance or a credit balance, depending on the nature of the account. An asset account will have a debit balance as normal balance because an asset is a debit account. Similarly, a liability account will have the normal balance as a credit balance because it is amount owed, representing a credit account. Equity is also said to have a credit balance as its normal balance. However, sometimes the normal balances may be reversed, often due to incorrect journal or posting entries or other accounting/ clerical errors.
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Question
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Statement of
Cash Flows The comparative
balance sheet of Whitman Co. at December 31, 20Y2 and 20Y1, is as follows:Dec. 31, 20Y2 Dec. 31, 20Y1 Assets Cash $ 612,820 $ 661,020 Accounts receivable (net)557,670 508,640 Inventories 845,690 778,280 Prepaid expenses 19,610 23,290 Land 210,810 318,670 Buildings 974,380 600,560 Accumulated depreciation -buildings(275,770) (257,380) Equipment 343,180 303,350 Accumulated depreciation-equipment (94,370) (106,020) Total assets $3,194,020 $2,830,410 Liabilities and Stockholders' Equity Accounts payable (merchandise creditors) $ 606,860 $ 640,400 Bonds payable 178,870 0 Common stock, $20 par 210,000 78,000 Excess of paid-in capital over par 505,000 373,000 Retained earnings 1,693,290 1,739,010 Total liabilities and stockholders’ equity $3,194,020 $2,830,410 The noncurrent asset, noncurrent liability, and stockholders' equity accounts for 20Y2 are as follows:
ACCOUNT Land ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 318,670 Apr. 20 Realized $100,300 cash from sale 107,860 210,810
ACCOUNT Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 600,560 Apr. 20 Acquired for cash 373,820 974,380
ACCOUNT Accumulated Depreciation-Buildings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 257,380 Dec. 31 Depreciation for year 18,390 275,770
ACCOUNT Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 303,350 Jan. 26 Discarded, no salvage 33,400 269,950 Aug. 11 Purchased for cash 73,230 343,180
ACCOUNT Accumulated Depreciation-Equipment ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 106,020 Jan. 26 Equipment discarded 33,400 72,620 Dec. 31 Depreciation for year 21,750 94,370
ACCOUNT Bonds Payable ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 May 1 Issued 10-year bonds 178,870 178,870
ACCOUNT Common Stock, $20 par ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 78,000 Dec. 7 Issued 6,600 shares of common
stock for $40 per share132,000 210,000
ACCOUNT Paid-in Capital in Excess of Par-Common Stock ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 373,000 Dec. 7 Issued 6,600 shares of common
stock for $40 per share132,000 505,000
ACCOUNT Retained Earnings ACCOUNT NO. Balance Date Item Debit Credit Debit Credit 20Y2 Jan. 1 Balance 1,739,010 Dec. 31 Net loss 22,010 1,717,000 Dec. 31 Cash dividends 23,710 1,693,290 Required:
Prepare a statement of cash flows, using the indirect method of presenting cash flows from (used for) operating activities. Use the minus sign to indicate
cash outflows , cash payments, decreases in cash, or any negative adjustments.Whitman Co. Statement of Cash Flows For the Year Ended December 31, 20Y2 Cash flows from (used for) operating activities: $fill in the blank 2 Adjustments to reconcile net loss to net cash flows from (used for) operating activities: fill in the blank 4 fill in the blank 6 Changes in current operating assets and liabilities: fill in the blank 8 fill in the blank 10 fill in the blank 12 fill in the blank 14 Net cash flows used for operating activities $fill in the blank 15 Cash flows from (used for) investing activities: $fill in the blank 17 fill in the blank 19 fill in the blank 21 Net cash flows used for investing activities fill in the blank 22 Cash flows from (used for) financing activities: $fill in the blank 24 fill in the blank 26 fill in the blank 28 Net cash flows from financing activities fill in the blank 29 $fill in the blank 31 Cash balance, January 1, 20Y2 fill in the blank 32 Cash balance, December 31, 20Y2 $fill in the blank 33
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