Note Homework is graded on completion basis Make sure you ma

Note: Homework is graded on completion basis. Make sure you make a thorough effort on each question to ensure full points are earned.

Note: Part 1 and Part 2 are not related problems.

Required: Prepare the balance sheet. Note: Ignore income taxes.

Note: Ending Retained Earnings is $410,000. I am providing this information to you so that you do not need to prepare an income statement and retained earnings statement.

1 Normal T No Spac.. Heading 1 H Paragraph Part 1 -Balance Sheet/ DebitCredit 197,000 435,000 Cash Accounts Receivable All owance for Doubtful Accounts Notes Receivable Supplies Inventory Debt Investments (trading) cost Equipment Accumulated Deperci BuildinR Accumulated Deperciation Buildi Land Franchises Patents De bt Investne nts tlong-term Equity Investments (long-term) Accounts Payable Salaries and Wages Payable Notes Payable (short-term) Dividends Payable Accrued Liabi lities Notes Payable (long-term) Bonds Payable Common Stock. Par S 5.00 APIC Treasury Stock Retained Earnings Cash Dividends Sales Revenut Sales Discounts Sales Returns and Allowances cOGS Purchase Diwounts Freight itn Selling Expenses Administr ati ve Experses Interest ExpensS Re nt Re venus Gairi 25,000 597,000 600,000 1, 040,000 ation Equi pment 60,000 152,000 260,00o 160,000 195,000 299,000 277,000 455,000 136,000 96,000 900,000 1, 0oo,oo0 1?000,000 80.000 191,000 78.000 8 100,000 2. 00o.000 soo.ooo 211,000 5 Invtenit Revenue 5 12. 315 00e 12.3us.oop Ch ????e

Solution

Part 1)

The balance sheet is prepared as below:

____

Part 2)

The cash flow statement is given as below:

____

The value of free cash flow is arrived as below:

Free Cash Flow = Net Cash Provided by Operating Activities - Purchase of Equipment - Dividends = 137,000 - 17,000 - 133,000 = -$13,000

Balance Sheet
Dec-31,XXXX
Assets
Current Assets:
Cash		197,000
Accounts Receivable	435,000
Less Allowance for Doubtful Debts	25,000	410,000
Inventory		597,000
Debt Investments (Trading)		153,000
Total Current Assets			1,357,000
Long Term Investments:
Debt Investment (Long Term)		299,000
Equity Investments (Long Term)		277,000
Total Long Term Investments			576,000
Property, Plant and Equipment:
Land		260,000
Equipment	600,000
Less Accumulated Depreciation - Equipment	60,000	540,000
Building	1,040,000
Less Accumulated Depreciation - Building	152,000	888,000
Total Property, Plant and Equipment			1,688,000
Intangible Assets:
Franchises		160,000
Patents		195,000
Total Intangible Assets			355,000
Total Assets			$3,976,000
Liabilities and Stockholder\'s Equity
Current Liabilities:
Accounts Payable		455,000
Notes Payable		90,000
Dividends Payable		136,000
Accrued Liabilities		96,000
Total Current Liabilities			777,000
Long Term Debt:
Notes Payable		900,000
Bonds Payable		1,000,000
Total Long Term Liabilities			1,900,000
Total Liabilities			2,677,000
Stockholder\'s Equity:
Paid-in Capital
Common Stock	1,000,000
Additional Paid-in Capital	80,000	1,080,000
Retained Earnings		410,000
Total Paid-in Capital and Retained Earnings		1,490,000
Less Treasury Stock		191,000
Total Stockholder\'s Equity			1,299,000
Total Liabilities and Stockholder\'s Equity			$3,976,000