Fill This Form To Receive Instant Help
Homework answers / question archive / The comparative balance sheet for Last Assignment, Inc
The comparative balance sheet for Last Assignment, Inc. is as follows: Current Prior Year Year Assets Cash $172,300 $58,000 Accounts Receivable 108,500 115,000 Inventory 153,400 149,600 Prepaid Insurance 1,200 4,800 Land 0 10,000 Equipment 318,500 268,500 Accumulated Depreciation -80,100 -66,100 Total Assets $673,800 $539,800 Liabilities & Stockholders' Equity Accounts Payable $110,000 $98,000 Note Payable (due in 5 years) 20,000 0 Common Stock 30,000 10,000 Additional Paid-in Capital, Common Stock 190,000 150,000 Retained Earnings 323,800 281,800 Total Liabilities & Stockholders' Equity $673,800 $539,800 Additional data obtained from the current year income statement and from a review of the general ledger reveals the following 1. Net Income from Income Statement was $62,000. 2. Depreciation Expense reported on the Income Statement was $44,000. 3. Equipment was purchased at a cost of $90,000. 4. Equipment with an original cost of $30,000 and accumulated depreciation of $20,000 was sold for $ 8,000. 5. Fully depreciated equipment costing $10,000 with no residual value was discarded (1.e. thrown away). 6. $20,000 was received upon issuing the Note Payable. 7. Commons stock was issued for cash 8. Cash dividends declared and paid amounted to $ 20,000. 9. The current year balance for Land is zero because it was sold for $50,000 during the current year. Required: Using the indirect method, prepare a Cash Flow Statement for the current year.
Last Assignment inc
Cash Flow statement:
For the year ended 20XX
Particulars | Amount ($) | Amount ($) |
Cash Flow from operating Cash Flows: | ||
Net income for the year : | 62,000 | |
Adjustments to reconcile net incom to net cash flow | ||
from operation activities. | ||
Add: Depreciation (Note 1) | 44,000 | |
Add: Loss on sale of equipment ( Note 2) | 2,000 | |
Less: Profit on sale of Land ( Note 3 ) | ( 40,000) | |
Changes in Current Operating Assets & Liabilities | ||
Add: Decrease in Account receivables |
6,500 | |
Add: Decrease in Prepaid Insurance | 3,600 | |
Add: Increase in Accouonts Payables | 12,000 | |
Less: Increase in Inventory | (3,800) | |
Net Cash flow from Operating Activities | 86,300 | |
Cash flow from Investing Activities: | ||
Add: Sale of Equipment | 8,000 | |
Less: Purchase of Equipment | (90,000) | |
Add: Sale of Land | 50,000 | |
Net Cash flow from Investing Activities | (32,000) | |
Cash flow from Financing Activities: | ||
Add: Issue Of Common Stock | 20,000 | |
Add: Issue Of Additinal paid in capital | 40,000 | |
Less: Dividend Paid | (20,000) | |
Net Cash flow from Financing Activities | 40,000 | |
Increase in Cash | 94,300 | |
Cash at the beginning of the year | 58,000 | |
Add: Cash received from notes Paybles(in Bank) | 20,000 | |
Cash at the end of the year | 1,72,300 |
Working notes
Note 1: Depreciation
1) Cureent year Depreciation = $ 44,000
2) Increase/(decrease) in accumulated depreciation = $ (80,100 - 66,100) = $ 14,000
3) An equipment sold with an accumulated depreiation of $ 20,000
4) A fully depreciated equipment discarded ( with no residual value) = $ 10,000
Note 2: Losson sale of equipment
(Cost - Accumulated depreciation) - Sale value = $ [ ( 30,000 - 20,000) - 8,000) ] = $ 2,000