The comparative balance sheet of Pelican Joe Industries Inc. for December 31, 2016 and 2015, is as follows: 1 Dec. 31, 2016 Dec. 31, 2015 2 Assets 3 Cash $490.00 $160.00 4 Accounts receivable (net) 280.00 200.00 5 Inventories 175.00 110.00 6 Land 400.00 450.00 7 Equipment 225.00 175.00 8 Accumulated depreciation-equipment (60.00) (30.00) 9 Total assets $1,510.00 $1,065.00 10 Liabilities and Stockholders’ Equity 11 Accounts payable (merchandise creditors) $175.00 $160.00 12 Dividends payable 30.00 13 Common stock, $10 par 100.00 50.00 14 Paid-in capital: Excess of issue price over par—common stock 250.00 125.00 15 Retained earnings 955.00 730.00 16 Total liabilities and stockholders’ equity $1,510.00 $1,065.00 The following additional information is taken from the records: 1. Land was sold for $125. 2. Equipment was acquired for cash. 3. There were no disposals of equipment during the year. 4. The common stock was issued for cash. 5. There was a $325 credit to Retained Earnings for net income. 6. There was an $100 debit to Retained Earnings for cash dividends declared. Required: A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash out flow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section. B. Was the net cash flow from operations for Pelican Joe Industries Inc. more or less than net income? What is the source of this difference? Labels and Amount Descriptions Labels and Amount Descriptions Amortization of intangible assets Cash paid for dividends Cash paid for purchase of equipment Cash received from sale of common stock Cash received from sale of land December 31, 2016 Decrease in accounts payable Decrease in accounts receivable Decrease in cash Decrease in inventories Depreciation For the Year Ended December 31, 2016 Gain on sale of land Increase in accounts payable Increase in accounts receivable Increase in cash Increase in inventories Loss on sale of land Net cash flow from operating activities Net cash flow used for operating activities Net cash flow from investing activities Net cash flow used for investing activities Net cash flow from financing activities Net cash flow used for financing activities Net income Net loss Statement of Cash Flows A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section. B. Was the net cash flow from operations for Pelican Joe Industries Inc. more or less than net income? What is the source of this difference? Net cash flow from operations was than net income. The source(s) of the difference are: Check all that apply. Sale of common stock Dividends paid Changes in current operating assets and liabilities Depreciation expense Purchase of equipment Gain on the sale of land

The comparative balance sheet of Pelican Joe Industries Inc. for December 31, 2016 and 2015, is as follows: 1 Dec. 31, 2016 Dec. 31, 2015 2 Assets 3 Cash $490.00 $160.00 4 Accounts receivable (net) 280.00 200.00 5 Inventories 175.00 110.00 6 Land 400.00 450.00 7 Equipment 225.00 175.00 8 Accumulated depreciation-equipment (60.00) (30.00) 9 Total assets $1,510.00 $1,065.00 10 Liabilities and Stockholders’ Equity 11 Accounts payable (merchandise creditors) $175.00 $160.00 12 Dividends payable 30.00 13 Common stock, $10 par 100.00 50.00 14 Paid-in capital: Excess of issue price over par—common stock 250.00 125.00 15 Retained earnings 955.00 730.00 16 Total liabilities and stockholders’ equity $1,510.00 $1,065.00 The following additional information is taken from the records: 1. Land was sold for $125. 2. Equipment was acquired for cash. 3. There were no disposals of equipment during the year. 4. The common stock was issued for cash. 5. There was a $325 credit to Retained Earnings for net income. 6. There was an $100 debit to Retained Earnings for cash dividends declared. Required: A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash out flow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section. B. Was the net cash flow from operations for Pelican Joe Industries Inc. more or less than net income? What is the source of this difference? Labels and Amount Descriptions Labels and Amount Descriptions Amortization of intangible assets Cash paid for dividends Cash paid for purchase of equipment Cash received from sale of common stock Cash received from sale of land December 31, 2016 Decrease in accounts payable Decrease in accounts receivable Decrease in cash Decrease in inventories Depreciation For the Year Ended December 31, 2016 Gain on sale of land Increase in accounts payable Increase in accounts receivable Increase in cash Increase in inventories Loss on sale of land Net cash flow from operating activities Net cash flow used for operating activities Net cash flow from investing activities Net cash flow used for investing activities Net cash flow from financing activities Net cash flow used for financing activities Net income Net loss Statement of Cash Flows A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section. B. Was the net cash flow from operations for Pelican Joe Industries Inc. more or less than net income? What is the source of this difference? Net cash flow from operations was than net income. The source(s) of the difference are: Check all that apply. Sale of common stock Dividends paid Changes in current operating assets and liabilities Depreciation expense Purchase of equipment Gain on the sale of land

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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Question

The comparative balance sheet of Pelican Joe Industries Inc. for December 31, 2016 and 2015, is as follows:

1		Dec. 31, 2016	Dec. 31, 2015
2	Assets
3	Cash	$490.00	$160.00
4	Accounts receivable (net)	280.00	200.00
5	Inventories	175.00	110.00
6	Land	400.00	450.00
7	Equipment	225.00	175.00
8	Accumulated depreciation-equipment	(60.00)	(30.00)
9	Total assets	$1,510.00	$1,065.00
10	Liabilities and Stockholders’ Equity
11	Accounts payable (merchandise creditors)	$175.00	$160.00
12	Dividends payable	30.00
13	Common stock, $10 par	100.00	50.00
14	Paid-in capital: Excess of issue price over par—common stock	250.00	125.00
15	Retained earnings	955.00	730.00
16	Total liabilities and stockholders’ equity	$1,510.00	$1,065.00

The following additional information is taken from the records:

1.	Land was sold for $125.
2.	Equipment was acquired for cash.
3.	There were no disposals of equipment during the year.
4.	The common stock was issued for cash.
5.	There was a $325 credit to Retained Earnings for net income.
6.	There was an $100 debit to Retained Earnings for cash dividends declared.

Required:

Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash out flow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section.

Was the net cash flow from operations for Pelican Joe Industries Inc. more or less than net income? What is the source of this difference?

Labels and Amount Descriptions

Labels and Amount Descriptions
Amortization of intangible assets
Cash paid for dividends
Cash paid for purchase of equipment
Cash received from sale of common stock
Cash received from sale of land
December 31, 2016
Decrease in accounts payable
Decrease in accounts receivable
Decrease in cash
Decrease in inventories
Depreciation
For the Year Ended December 31, 2016
Gain on sale of land
Increase in accounts payable
Increase in accounts receivable
Increase in cash
Increase in inventories
Loss on sale of land
Net cash flow from operating activities
Net cash flow used for operating activities
Net cash flow from investing activities
Net cash flow used for investing activities
Net cash flow from financing activities
Net cash flow used for financing activities
Net income
Net loss

Statement of Cash Flows

A. Prepare a statement of cash flows, using the indirect method of presenting cash flows from operating activities. Refer to the Labels and Amount Descriptions list provided for the exact wording of the answer choices for text entries. Be sure to complete the heading of the statement. In the operating activities section, use the minus sign to indicate cash outflows, decreases in cash and a net cash outflow, if required. In the investing and financing activities section, use a minus sign only to indicate a NET cash outflow for the section.

B. Was the net cash flow from operations for Pelican Joe Industries Inc. more or less than net income? What is the source of this difference?

Net cash flow from operations was than net income.

The source(s) of the difference are: Check all that apply.

Sale of common stock

Dividends paid

Changes in current operating assets and liabilities

Depreciation expense

Purchase of equipment

Gain on the sale of land

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