Question

*Question 5 The comparative unclassified statement of financial position for Sunland Ltd. follows: SUNLAND LTD. Statement of Financial Position December 31 Assets 2018 2017 Cash $54,000 $29,000 Accounts receivable 85,000 74,500 Inventory 182,000 195,500 Long-term investments 79,000 110,000 Equipment 265,000 156,000 (65,000) $600,000 $532,000 Accumulated depreciation (33,000) Total assets Liabilities and Shareholders' Equity Accounts payable Bank loan payable S36,000 $45,000 126,000 184,000 219,000 171,000 Common shares Retained eamings 132,000 219,000 $532,000 Total liabilities and shareholders' equity $600,000 Additional information: Net income was $98,700 1. Sales were $970,000 2 Cost of goods sold was $7588,000 3. 4. Operating expenses were $44,000, exclusive of depreciation expense. Depreciation expense was $32,000 5. Interest expense was $14,000 6. Income tax expense was $29,000 Long-term investments were sold at a gain of $5,700. 7. 8. No equipment was sold during the year $58,000 of the bank loan was repaid during the year 9. 10 Common shares were issued for $48,000 11

Answer 1

SUNLAND LTD
Statement of Cash flows
For the Year Ended December 31, 2018
Cash flows from operating activities
Net Income		$     98,700
Adjustments to reconcile net income to ;
Depreciation expense	$       32,000
Gain on sale of investment	$       (5,700)
Increase in accounts receivable	$    (10,500)
Decrease in inventory	$       13,500
Decrease in accounts payable	$       (9,000)
		$     20,300
Net cash provided by operating activities		$   119,000
Cash flows from investing activities
Cash received from Sale of investment	$       36,700		110000-79000+5700
Cash paid to purchase of equipment	$ (109,000)		156000-265000
Net cash used by investing activities		$   (72,300)
Cash flows from financing activities
Cash paid for bank loan	$    (58,000)
Payment of dividends	$    (11,700)		219000-132000-98700
Cash received from issuance of common stock	$       48,000
Net cash used by financing activities		$   (21,700)
Net Increase in cash		$     25,000
Cash and cash equivalents at beginning of period		$     29,000
Cash and cash equivalents at end of period		$     54,000

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