Homework SourseMONTGOMERY INC Comparative Balance Sheets December 31 2016 a
MONTGOMERY INC.
Comparative Balance Sheets
December 31, 2016 and 2015
Use the above financial statements and additional information to prepare a statement of cash flows for the year ended December 31, 2016, using the indirect method. (Amounts to be deducted should be indicated by a minus sign.)
| MONTGOMERY INC. | |||||||
| 2016 | 2015 | ||||||
| Assets | |||||||
| Cash | $ | 30,400 | $ | 30,550 | |||
| Accounts receivable, net | 10,050 | 12,150 | |||||
| Inventory | 90,100 | 70,150 | |||||
| Total current assets | 130,550 | 112,850 | |||||
| Equipment | 49,900 | 41,500 | |||||
| Accum. depreciation—Equipment | (22,500 | ) | (15,300 | ) | |||
| Total assets | $ | 157,950 | $ | 139,050 | |||
| Liabilities and Equity | |||||||
| Accounts payable | $ | 23,900 | $ | 25,400 | |||
| Salaries payable | 500 | 600 | |||||
| Total current liabilities | 24,400 | 26,000 | |||||
| Equity | |||||||
| Common stock, no par value | 110,000 | 100,000 | |||||
| Retained earnings | 23,550 | 13,050 | |||||
| Total liabilities and equity | $ | 157,950 | $ | 139,050 | |||
Solution
Statement of cash flow :
| Cash flow from operating activities | ||
| Net income | 10500 | |
| Adjustment to reconcile net income | ||
| Depreciation expense | 7200 | |
| Decrease account receivable | 2100 | |
| Increase inventory | -19950 | |
| Decrease account payable | -1500 | |
| Decrease salary payable | -100 | |
| -12250 | ||
| Net cash flow from operating activities | -1750 | |
| Cash flow from investing activities | ||
| Purchase equipment | -8400 | |
| Net cash flow from investing activities | -8400 | |
| Cash flow from financing activities | ||
| Issue common stock | 10000 | |
| Net cash flow from financing activities | 10000 | |
| Net cash flow | -150 | |
| Beginning cash | 30550 | |
| Ending cash | 30400 | |
