Total assets $fill in the blank 8 $fill in the blank 9 Liabilities Accounts payable (merchandise creditors) $fill in the blank 10 $391,800 Accrued expenses payable (operating expenses) 41,150 fill in the blank 11 Dividends payable fill in the blank 12 19,200 Total liabilities $498,080 $fill in the blank 13 Stockholders' Equity Common stock, $4 par $fill in the blank 14 $100,000 Paid-in capital in excess of par fill in the blank 15 280,000 Retained earnings fill in the blank 16 fill in the blank 17 Total stockholders' equity $1,858,520 $fill in the blank 18 Total liabilities and stockholders' equity $fill in the blank 19 $fill in the blank 20
Mastery Problem: Statement of
Championship Boxing, Inc.
Championship Boxing, Inc. is a small manufacturer of cardboard boxes of all sizes. You have reported for your first day of work, and the company is in an uproar. Yearly financial statements are being prepared, but a computer malfunction of the company’s new BOX-9000 computer has inadvertently erased parts of the company’s
Unfortunately, financial statements are to be presented at a stockholders’ meeting in one hour. The company uses the indirect method to prepare its statement of cash flows (rather than the direct method), so your new supervisor believes the missing data for the balance sheet can be prepared using the statement of cash flows. You are assigned this task, since you were top student in your business school class. Meanwhile, the supervisor will go to the stockholders’ meeting and give some introductory remarks.
In addition to the statement of cash flows, the following data survived the computer mishap:
- The investments were sold for $280,000 cash.
- Equipment was acquired for $152,000 cash.
- Land was acquired for $326,000 cash.
- There were no disposals of equipment during the year.
- 12,500 shares of common stock were sold for cash during the year.
- There was a $96,000 debit to
Retained Earnings for cash dividends declared.
Statement of Cash Flows
Your supervisor has provided you with the following statement of cash flows, prepared using the indirect method. Recall that the statement of cash flows consists of three sections: cash flows from operating activities, cash flows from investing activities, and cash flows from financing activities. Review the statement, and then proceed to the next panel.
| Championship Boxing, Inc. Statement of Cash Flows For the Year Ended December 31, 20Y8 |
||||
| Cash flows from (used for) operating activities: | ||||
| Net income | $186,540 | |||
| Adjustments to reconcile net income to net cash flow from operating activities: | ||||
| |
18,400 | |||
| Gain on sale of investments | (50,000) | |||
| Changes in current operating assets and liabilities: | ||||
| Increase in |
(25,410) | |||
| Increase in inventories | (33,450) | |||
| Increase in accounts payable | 41,130 | |||
| Decrease in accrued expenses payable | (12,470) | |||
| Net cash flow from operating activities | $124,740 | |||
| Cash flows from (used for) investing activities: | ||||
| Cash received from sale of investments | $280,000 | |||
| Cash paid for purchase of land | (326,000) | |||
| Cash paid for purchase of equipment | (152,000) | |||
| Net cash flow used for investing activities | (198,000) | |||
| Cash flows from (used for) financing activities: | ||||
| Cash received from sale of common stock | $187,500 | |||
| Cash paid for dividends | (91,200) | |||
| Net cash flow from financing activities | 96,300 | |||
| Net increase in cash | $23,040 | |||
| Cash balance, January 1, 20Y8 | 585,920 | |||
| Cash balance, December 31, 20Y8 | $608,960 |
Balance Sheet
Using the information on above, complete the following comparative balance sheet.
| Championship Boxing, Inc. Comparative Balance Sheet December 31, 20Y8 and 20Y7 |
||||||
| 20Y8 | 20Y7 | |||||
| Assets | ||||||
| Cash | $fill in the blank 1 | $585,920 | ||||
| Accounts receivable (net) | 230,970 | fill in the blank 2 | ||||
| Inventories | fill in the blank 3 | 618,420 | ||||
| Investments | 0 | fill in the blank 4 | ||||
| Land | fill in the blank 5 | 0 | ||||
| Equipment | 705,200 | fill in the blank 6 | ||||
| (166,400) | fill in the blank 7 | |||||
| Total assets | $fill in the blank 8 | $fill in the blank 9 | ||||
| Liabilities | ||||||
| Accounts payable (merchandise creditors) | $fill in the blank 10 | $391,800 | ||||
| Accrued expenses payable (operating expenses) | 41,150 | fill in the blank 11 | ||||
| Dividends payable | fill in the blank 12 | 19,200 | ||||
| Total liabilities | $498,080 | $fill in the blank 13 | ||||
| Common stock, $4 par | $fill in the blank 14 | $100,000 | ||||
| Paid-in capital in excess of par | fill in the blank 15 | 280,000 | ||||
| Retained earnings | fill in the blank 16 | fill in the blank 17 | ||||
| Total stockholders' equity | $1,858,520 | $fill in the blank 18 | ||||
| Total liabilities and stockholders' equity | $fill in the blank 19 | $fill in the blank 20 |
Trending now
This is a popular solution!
Step by step
Solved in 2 steps with 1 images
