The comparative balance sheets for Wildhorse Co as of Decemb

The comparative balance sheets for Wildhorse Co. as of December 31 are presented below.

Wildhorse Co.
Comparative Balance Sheets
December 31

Assets

2017

2016

Cash

$ 93,364

$ 61,785

Accounts receivable

68,650

79,634

Inventory

207,941

194,966

Prepaid expenses

20,979

28,833

Land

199,085

178,490

Buildings

274,600

274,600

Accumulated depreciation—buildings

(82,380

)

(54,920

)

Equipment

308,925

212,815

Accumulated depreciation—equipment

(61,785

)

(48,055

)

Total

$1,029,379

$928,148

Liabilities and Stockholders’ Equity

Accounts payable

$ 61,414

$ 49,428

Bonds payable

411,900

411,900

Common stock, $1 par

274,600

219,680

Retained earnings

281,465

247,140

Total

$1,029,379

$928,148

Additional information:

Prepare a statement of cash flows for the year ended December 31, 2017, using the indirect method.

Wildhorse Co. Comparative Balance Sheets December 31
Assets		2017			2016
Cash		$ 93,364			$ 61,785
Accounts receivable		68,650			79,634
Inventory		207,941			194,966
Prepaid expenses		20,979			28,833
Land		199,085			178,490
Buildings		274,600			274,600
Accumulated depreciation—buildings		(82,380	)		(54,920	)
Equipment		308,925			212,815
Accumulated depreciation—equipment		(61,785	)		(48,055	)
Total		$1,029,379			$928,148
Liabilities and Stockholders’ Equity
Accounts payable		$ 61,414			$ 49,428
Bonds payable		411,900			411,900
Common stock, $1 par		274,600			219,680
Retained earnings		281,465			247,140
Total		$1,029,379			$928,148

Solution

Answer

Cash Flow Statement

Detail

Net

Cash Flow from Operating Activities

Net Income before taxes

       50,801

Add: Non cash and Non operating Expenses

Depreciation on Equipmeny

       30,206

Depreciation on Building

       27,460

Loss on sale of Equip.

         2,746

Working Capital Changes

Decrease in Accounts Receivable

       10,984

Increase in Inventory

    (12,975)

Decrease in Prepaid expenses

         7,854

Increase in Accounts Payable

       11,986

Cash Flow from Operating Activities (A)

    129,062

Cash Flow from Investing Activities

Sale of Equipment

       10,984

Purchases of Equipment

(126,316)

Sale of Land

       34,325

Cash Used in Investing Activities (B)

    (81,007)

Cash Flow from Financing Activities

Dividend Paid

    (16,476)

Cash used in Financing Activities ( C)

    (16,476)

Decrease in Cash (A+B+C)

       31,579

Opening Cash

       61,785

Closing Cash

       93,364

Euipment

Beg. Bal

   212,815

Bank

     10,984

Acc. Depreciation

     16,476

P&l (Profit on sale)

Loss

        2,746

Bank (Purchases)

   126,316

Closing Bal.

   308,925

Total

   339,131

Total

   339,131

Acc. Depreciation - Equipment

Beg. Bal

     48,055

Equipment (Sold) (Bal.)

     16,476

P&L (Current Year)

     30,206

Closing Bal.

     61,785

Total

     78,261

Total

     78,261

Land

Beg. Bal

   178,490

Bank

     34,325

Common Stock

     54,920

Closing Bal.

   199,085

Total

   233,410

Total

   233,410

Cash Flow Statement
	Detail	Net
Cash Flow from Operating Activities
Net Income before taxes		50,801
Add: Non cash and Non operating Expenses
Depreciation on Equipmeny	30,206
Depreciation on Building	27,460
Loss on sale of Equip.	2,746
Working Capital Changes
Decrease in Accounts Receivable	10,984
Increase in Inventory	(12,975)
Decrease in Prepaid expenses	7,854
Increase in Accounts Payable	11,986
Cash Flow from Operating Activities (A)		129,062
Cash Flow from Investing Activities
Sale of Equipment	10,984
Purchases of Equipment	(126,316)
Sale of Land	34,325
Cash Used in Investing Activities (B)		(81,007)
Cash Flow from Financing Activities
Dividend Paid	(16,476)
Cash used in Financing Activities ( C)		(16,476)
Decrease in Cash (A+B+C)		31,579
Opening Cash		61,785
Closing Cash		93,364