50.1K

Verified Solution

Link Copied!

Question 22 The comparative balance sheets of Posner Company, for Years 1 and 2 ended December 31, 2018 appear below in condensed form. Year 2 Year 1 Cash $ 53,000 $ 50,000 37,000 48,000 Accounts Receivable (net) Inventories 108,500 100,000 Investments 70,000 Equipment 573,200 450,000 Accumulated Depreciation-Equipment (142.000) (176.000) $629,700 $542.000 $ 62,500 Accounts Payable Bonds Payable, Due Year 2 Common Stock, $10 par Paid-In Capital in Excess of Par-Common Stock Retained Earnings 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: $625,700 340.000 $285,700 $26,000 68.000 94,000 $191,700 Sales Cost of merchandise sold Gross profit Operating expenses: Depreciation expense Other operating expenses Income from operations Other revenue and expense: Gain on sale of investment Interest expense Income before income tax Income tax Net income $4,000 (6,000 (2.000) $189,700 60.700 $129,000 Additional data for the current year are as follows: (a) The equipment was purchased for cash $183,200. (b) Bonds payable for $100,000 were retired by payment at their face amount. (C) 5,000 shares of common stock were issued at $13 for cash. (d) Cash dividends declared and paid $25,000. (e) The investment was sold for $74,000 cash Questis Prepare a statement of cash flows using the indirect method: The Posner Company Statement of Cash Flows For the Year Ended December 31, 2018 Cash flows from operating activities: Adis, to reconcile net income to net cash flow from op activitie Changes in current operating assets and liabilities: Net cash flow from operating activities Cash flows from (used for) investing activities: Net cash flow from investing activities Cash flows from used for financing activities: Net cash flow from financing activities Increase (decrease in cash Cash at the beginning of the year Cash at the end of the year

Answer & Explanation Solved by verified expert

See Answer