Question

This problem (#4) is 3 pages. I will certainly upvote. Thanks for being organized.

Problem 4 Page 6 Chapter 05 Group work - STU.xlsx Lansbury Inc. had the following balance sheet at December 31, 2019 fend of the prior year). Assets Cash Landsbury Inc. Balance Sheet December 31, 2019 Liabilities and Stockholders' Equity 20,000 Accounts payable 21,200 Notes payable (long-term) 32,000 Bonds payable 81.000 Common stock 40,000 Retained earnings 194,200 $ $ $ $ $ $ 30,000 41,000 Accounts receivable Investments Plant assets (net) Land S $ $ $ 100,000 23, 200 194,200 $ During 2020, the following occurred. 1. Lansbury Inc. sold part of its debt investment portfolio for $15,000. This transaction resulted in a gain of $3,400 for the firm. The company classifies its investments as available-for-sale. 2. Atract of land was purchased for $13,000 cash. 3. Long-term notes payable in the amount of $16,000 were retired before maturity by paying $16,000 cash. 4. An additional $20,000 in common stock was issued at par. 5. Dividends of $8,200 were declared and paid to stockholders. 6. Net income for 2020 was $32,000 after allowing for depreciation of $11,000. 7. Land was purchased through the issuance of $35,000 in bonds. 8. At December 31, 2020, Cash was $37,000 and Accounts Receivable was $41,600. Accounts Payable remained at $30,000.

Answer 1

LANSBURY INC.
Statement of Cash Flows
For the Year Ended December 31, 2020
Cash flows from operating activities
Net income		32000
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation expense	11000
Loss (gain) on sale of investments	-3400
Decrease (increase) in accounts receivable	-20400
Increase (decrease) in accounts payable	0	-12800
Net cash provided by operating activities		19200
Cash flows from investing activities
Sale of investments	15000
Purchase of land	-13000
Net cash used by investing activities		2000
Cash flows from financing activities
Issuance of common stock	20000
Retirement of notes payable	-16000
Payment of cash dividends	-8200
Net cash used by financing activities		-4200
Net increase in cash		17000
Cash at beginning of year		20000
Cash at end of year		37000
Significant noncash investing and financing activities
Land purchased through issuance of bonds		35000

Investments:
December 31, 2019 balance	32000
Cash from sale of investments	-15000
Gain on sale of investments	3400
December 31, 2020 balance	20400
Plant assets:
December 31, 2019 balance	81000
Depreciation, current year	-11000
December 31, 2020 balance	70000
Land:
December 31, 2019 balance	40000
Purchase of land	13000
Purchase of land for bonds	35000
December 31, 2020 balance	88000
Notes payable:
December 31, 2019 balance		41000
Retirement of notes		-16000
December 31, 2020 balance		25000
Bonds payable:
December 31, 2019 balance		0
Issuance of bonds		35000
December 31, 2020 balance		35000
Common stock:
December 31, 2019 balance		100000
Issuance of common stock at par		20000
December 31, 2020 balance		120000
Retained earnings:
December 31, 2019 balance		23200
Net income		32000
Dividends declared		-8200
December 31, 2020 balance		47000

LANSBURY INC.
Balance Sheet
December 31, 2020
Assets		Liabilities and Stockholders' Equity
Cash	37000	Accounts payable	30000
Accounts receivable	41600	Notes payable (long-term)	25000
Investments in debt securities	20400	Bonds payable	35000
Plant assets (net of accum. Depr.)	70000	Common stock	120000
Land	88000	Retained earnings	47000
	257000		257000