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 $146,460.00 $179,930.00 4 Accounts receivable (net) 224,660.00 242,920.00 5 Merchandise inventory 321,290.00 299,000.00 6 Prepaid expenses 13,120.00 10,510.00 7 Equipment 654,510.00 537,990.00 8 Accumulated depreciation (170,510.00) (132,770.00) 9 Total assets $1,189,530.00 $1,137,580.00 10 Liabilities and Stockholders’ Equity 11 Accounts payable (merchandise creditors) $249,550.00 $237,970.00 12 Mortgage note payable 0.00 335,000.00 13 Common stock, $10 par 75,000.00 25,000.00 14 Paid-in capital: Excess of issue price over par—common stock 500,000.00 330,000.00 15 Retained earnings 364,980.00 209,610.00 16 Total liabilities and stockholders’ equity $1,189,530.00 $1,137,580.00 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, $308,740. B. Depreciation reported on the income statement, $83,110. C. Equipment was purchased at a cost of $161,890 and fully depreciated equipment costing $45,370 was discarded, with no salvage realized. D. 10,000 shares of common stock were issued at $22 for cash. E. The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty. F. Cash dividends declared and paid, $153,370. 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. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

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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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	$146,460.00	$179,930.00
4	Accounts receivable (net)	224,660.00	242,920.00
5	Merchandise inventory	321,290.00	299,000.00
6	Prepaid expenses	13,120.00	10,510.00
7	Equipment	654,510.00	537,990.00
8	Accumulated depreciation	(170,510.00)	(132,770.00)
9	Total assets	$1,189,530.00	$1,137,580.00
10	Liabilities and Stockholders’ Equity
11	Accounts payable (merchandise creditors)	$249,550.00	$237,970.00
12	Mortgage note payable	0.00	335,000.00
13	Common stock, $10 par	75,000.00	25,000.00
14	Paid-in capital: Excess of issue price over par—common stock	500,000.00	330,000.00
15	Retained earnings	364,980.00	209,610.00
16	Total liabilities and stockholders’ equity	$1,189,530.00	$1,137,580.00

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, $308,740.
B.	Depreciation reported on the income statement, $83,110.
C.	Equipment was purchased at a cost of $161,890 and fully depreciated equipment costing $45,370 was discarded, with no salvage realized.
D.	10,000 shares of common stock were issued at $22 for cash.
E.	The mortgage note payable was not due for six years, but the terms permitted earlier payment without penalty.
F.	Cash dividends declared and paid, $153,370.

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. Use the minus sign to indicate cash out flows, cash payments, decreases in cash, or any negative adjustments.

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