tatement of Cash Flows for the following: The comparative balance sheet of Yellow Dog Enterprises Inc. at December 31, 20Y8 and 20Y7, is as follows: 1 Dec. 31, 20Y8 Dec. 31, 20Y7 2 Assets 3 Cash $95,000.00 $110,000.00 4 Accounts receivable (net) 260,000.00 280,000.00 5 Inventories 520,000.00 450,000.00 6 Prepaid expenses 15,000.00 5,000.00 7 Equipment 1,130,000.00 800,000.00 8 Accumulated depreciation-equipment (235,000.00) (190,000.00) 9 Total assets $1,785,000.00 $1,455,000.00 10 Liabilities and Stockholders’ Equity 11 Accounts payable (merchandise creditors) $100,000.00 $75,000.00 12 Mortgage note payable 0.00 500,000.00 13 Common stock, $10 par 500,000.00 200,000.00 14 Paid-in capital in excess of par—common stock 400,000.00 100,000.00 15 Retained earnings 785,000.00 580,000.00 16 Total liabilities and stockholders’ equity $1,785,000.00 $1,455,000.00 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, $250,000. b. Depreciation reported on the income statement, $135,000. c. Equipment was purchased at a cost of $420,000 and fully depreciated equipment costing $90,000 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. 30,000 shares of common stock were issued at $20 for cash. f. Cash dividends declared and paid, $45,000.

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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Statement of Cash Flows for the following:

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

1		Dec. 31, 20Y8	Dec. 31, 20Y7
2	Assets
3	Cash	$95,000.00	$110,000.00
4	Accounts receivable (net)	260,000.00	280,000.00
5	Inventories	520,000.00	450,000.00
6	Prepaid expenses	15,000.00	5,000.00
7	Equipment	1,130,000.00	800,000.00
8	Accumulated depreciation-equipment	(235,000.00)	(190,000.00)
9	Total assets	$1,785,000.00	$1,455,000.00
10	Liabilities and Stockholders’ Equity
11	Accounts payable (merchandise creditors)	$100,000.00	$75,000.00
12	Mortgage note payable	0.00	500,000.00
13	Common stock, $10 par	500,000.00	200,000.00
14	Paid-in capital in excess of par—common stock	400,000.00	100,000.00
15	Retained earnings	785,000.00	580,000.00
16	Total liabilities and stockholders’ equity	$1,785,000.00	$1,455,000.00

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, $250,000.
	b. Depreciation reported on the income statement, $135,000.
	c. Equipment was purchased at a cost of $420,000 and fully depreciated equipment costing $90,000 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. 30,000 shares of common stock were issued at $20 for cash.
	f. Cash dividends declared and paid, $45,000.

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