Question

Blake Weaver, Sandhill Enterprises' controller, is preparing the financial statements for 2016. He has completed the comparative balance sheets and income statement, which follow, and has gathered this additional information On December 31, 2016, Sandhill sold a piece of equipment with an original cost of $25,450 for $30,640 cash. The equipment had a book value of $13,600 On February 1, 2016, Sandhill issued $99,870 of common stock to raise cash in anticipation of the purchase of a new building later in the year On February 2, 2016, Sandhill took out a ten-year $76,120 long-term loan to provide the remaining funds needed to purchase the building .On May 15, 2016, Sandhill paid $146,500 for the new building The company repaid $4,670 of the long-term debt before the end of the year . For the Year Ended December 31, 2016 1,077,400 7,040 1,094,440 707,000 Gain on equipment sale Total revenue Cost of goods sold Operating expenses Depreciation expense 30,160 7.460 175,180 Interest expense Wages expenses Other expenses Income before taxes Tax expense 63,510 95,050 Comparative Balance Sheets As of December 31, 2016 Cash Accounts recelvable, net Inventory 129,700 42,500 287,950 270,090 125,900 95,270 543,550 407,860 306,800 173.900 96,260 66,100 Net property, plant, & equipment 210,540 107,800 754,090 %515,660 151,560 175,460 7,00 21,740 Total current assets Property, plant, & equipment Total assets Accounts payable Taxes payable Mortgage payable 71,450 240,710 197.200 352,270 252,400 161,10 66,060 13,380 318,460 Total liabilities & stockholders' equity $754,090 $515,660 Total liabilities Common stock Retained earnings Total stockholders' equity

Answer 1

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Cash flow statement comprises only cash inflow and outflow during the period:

Solution: Naming convention is not available can be slightly different per question format: Statement of Cash Flows Cash flow from operating Activities: Net Income (Loss) Adjustments to net Income Depreciation Gain on Sale of Equipment (30640-13600) Increase in Accounts Receivable Increase in Inventories Decrease in Accounts Payable Decrease in tax Payable $ 95,050 $ 30,160 $ 17,040 $ -17,860 S-30,630 $ -23,900 $ -4,040 (95270-125900) $ -63,310 31,740 A) Net cash Provided by Operating activities Cash Flow from Investing activities: Sale of Equipment Purchase of Building ( $ 30,640 146500 B) Net Cash used by Investing activities 115860 Cash Flow from financing activities: Preceeds from Issuance of common stock Preceeds from long term loan Repayment of long term debt (71450-76120) $ 99,870 $ 76,120 $ -4,670 C) Net Cash Provided by Financing activities 171320 Change in Cash(AtB+C) Cash, Beginning Balance Cash, Ending Balance $ 87,200 $ 42,500 129700