Question

Calculator The comparative balance sheets of Posner Company, for Years 1 and 2 ended December 31, appear below in condensed form: Year 2 Year 1 Assets Cash $50,000 $53,000 37,000 108,500 48,000 Accounts receivable (net) Inventories Investments Equipment Accumulated depreciation-equipment Total assets 573,200 (142,000) $629,700 100,000 70,000 450,000 (176,000) $542,000 $ 62,500 Liabilities and Stockholders' Equity Accounts payable Bonds payable, due Year 2 Common stock, $10 par Paid-in capital in excess of par-common stock Retained earnings Total liabilities and stockholders' equity 325,000 80,000 162,200 $629,700 $43,800 100,000 285,000 55,000 58,200 $542,000 The income statement for the current year is as follows:

Answer 1

	Posner Company
	Statement of cash flow
Cash flows from operating activities:
Net income for the year							129,000
Adjustments to reconcile net income to net cash from operating activities:
Depreciaton expense							26,000
Gain in sale of investment							-4,000
Change in current assets
Decrease in accounts receivable							11000
increase in inventories							-8500
increase in accounts payable							18700
Net cash flow from operating activities								172,200
Cash flows from investing activities
purchase of new equipment							-183,200
cash from sale of investment							74,000
net cash flow used for investing activities								-109,200
Cash flows from financing activities
Redemption of bonds							-100,000
Cash from common stock issue							65000
Cash dividend paid							-25,000
net cash flow used for financing activities								-60,000
net increase in cash								3,000
Cash at the beginning of the year								50,000
Cash at the end of the year								53,000