Problem 129A Condensed financial data of Waterway Industries

Problem 12-9A

Condensed financial data of Waterway Industries follow.

Waterway Industries
Comparative Balance Sheets
December 31

Assets

2017

2016

$ 114,736

$ 68,728

124,676

53,960

159,750

146,047

40,328

36,920

195,960

154,780

404,700

344,350

(71,000

)

(73,840

)

$969,150

$730,945

Liabilities and Stockholders’ Equity

$ 144,840

$ 95,566

23,430

29,820

156,200

207,320

312,400

248,500

332,280

149,739

$969,150

$730,945

Waterway Industries
Income Statement Data
For the Year Ended December 31, 2017

$551,613

$192,353

17,622

66,030

38,738

6,717

10,650

332,110

$ 219,503

Additional information:

Prepare a statement of cash flows using the indirect method. (Show amounts that decrease cash flow with either a - sign e.g. -15,000 or in parenthesis e.g. (15,000).)

Adjustments to reconcile net income to

Waterway Industries Comparative Balance Sheets December 31
Assets		2017			2016
Cash		$ 114,736			$ 68,728
Accounts receivable		124,676			53,960
Inventory		159,750			146,047
Prepaid expenses		40,328			36,920
Long-term investments		195,960			154,780
Plant assets		404,700			344,350
Accumulated depreciation		(71,000	)		(73,840	)
Total		$969,150			$730,945
Liabilities and Stockholders’ Equity
Accounts payable		$ 144,840			$ 95,566
Accrued expenses payable		23,430			29,820
Bonds payable		156,200			207,320
Common stock		312,400			248,500
Retained earnings		332,280			149,739
Total		$969,150			$730,945

Solution

Waterway Industries Statement of Cash Flows For the year ended Amount Cash flows from operating activities Net Income $219,503 Adjust to reconcile net income to net cash provided Depreciation expenses $66,030 Loss on disposal of plant assets $10,650 Increase in Accounts receivable -$70,716 Increase in Inventory -$13,703 Increase in Prepaid expenses -$3,408 Increase in Accounts Payable $49,274 Decrease in accrued expenses payable -$6,390 Net cash used by operating activities $251,240 Cash flows from investing activities Cash payment for acquisition of plant assets -$142,000 Sale of Plant Assets $2,130 Cash payment for acquisition of Long-term investment -$41,180 Net cash used by investing activities -$181,050 Cash flows from financing activities Issuance of Common Stock $63,900 Bond Payable matured -$51,120 Payment of Dividends -$36,962 Net cash provided by financing activities -$24,182 Net decrease in cash $46,008 Cash at Beginning of Period $68,728 Cash at End of Period $114,736