Question

PLEASE show STEP by STEP how to find the missing xxx values and why. Assume nothing when giving explanation as I know nothing. Thanks!

ACC 500 Financial Statement Exercise Ozark's 2016 Net Income was 140,000. Equipment purchases were made with cash. The increase in common stock and additional paid in capital is due to issuing additional shares for cash. Comparative balance sheets for Ozark follow. Prepare a statement of Cash Flows using the template provided. 2016 2015 Assets Cash Accounts receivable Inventories Prepaids Land Building and equipment Less: Accumulated depreciation Total assets XXX 199, 250 250,000 13,000 250,000 1,500,000 -205,000 2,465,950 472,000 71,500 278,800 XXX 250,000 1,300,000 -175,000 2,208,300 XXX 10,500 22,000 93,950 15,000 XXX Liabilities Accounts payable Accrued expenses Income taxes payable Stockholders' equity Common stock Paid in capital in excess of par Retained earnings Total liabilities and equity 710,000 990,000 646,350 XXX 700,000 800,000 586,350 xxx Page 1 of 2

The second page is the format in which the statement should be written.

Answer 1

The missing amounts are:

	2016	2015
Cash	458,700	472,000
Accounts receivable	199,250	71,500
Inventories	250,000	278,800
Prepaids	13,000	11,000
Land	250,000	250,000
Building and equipment	1,500,000	1,300,000
Less: accumulated depreciation	-     205,000	-     175,000
Total assets	2,465,950	2,208,300
Liabilities
Accounts payable	87,100	93,950
Accrued expenses	10,500	15,000
Income tax payable	22,000	13,000
Stockholder's equity
Common stock	710,000	700,000
Paid in capital in excess of par	990,000	800,000
Retained earnings	646,350	586,350
Total liabilities and equity	2,465,950	2,208,300

Cash flow statement is:

Cash flows from operating activities:
Net income		140,000
Add (deduct) noncash effects on operating income
Depreciation expense	30,000
Change in accounts receivable	-     127,750
Change in inventory	28,800
Change in prepaid insurance	-         2,000
Change in accounts payable	-         6,850
Change in accrued exp	-         4,500
Change in income tax payable	9,000	-       73,300
Net cash provided by operating activities		66,700
Cash flows from investing activities:
Purchase of equipment	-     200,000
Net cash used in investing activities		-     200,000
Cash flows from financing activities:
Proceeds from issuing stock	200,000
Dividends on common stock	-       80,000
Net cash provided by financing activities		120,000
Net decrease in cash		-       13,300
Cash balance at January 1, 2016		472,000
Cash balance at December 31, 2016		458,700

Calculations and explanations:

For 2016's balance sheer cash amount = total asset amount - sum of all assets except cash. Total liabilities and equity = total assets = 2,465,950. Thus accounts payable = 2,465,950 - sum of all other liabilities and equity account

For 2015 the same approach was used and so prepaid = total assets amount - sum of all other assets except prepaid. Total liabilities and equity for 2015 = total assets = 2,208,300. So income tax payable in 2015 = 2,208,300 - sum of all other liabilities and equity accounts

Cash flow statement:

Increase in current assets is shown as negative, decrease in current assets is a positive, increase in current liabilities is a positive and decrease in current liabilities is a negative.

Dividend computation: Change in retained earnings = 646,350 - 586,350 = $60,000. But net income for the year is 140,000

Thus dividend amount = 140,000 - 60,000 = 80,000