Problem 234 Culver Company had the following information ava

Problem 23-4 Culver Company had the following information available at the end of 2017 CULVERCOMPANY COMPARATIVE BALANCE SHEETS AS OF DECEMBER 31, 2017 AND 2016 2017 $10,030 20,350 22,050 41,710 2016 $4,020 12,860 30,240 34,740 Cash Accounts receivable Short-term investments Inventory Prepaid rent Prepaid insurance Supplies Land Buildings Accumulated depreciation-buildings Equipment Accumulated depreciation-equipment Patents 3,020 2,100 990 124,990 11,970 90 74 174,480 350,270 350,270 (105,850) (86,850 ) 520,560 400,880 (130,530 ) 44,870 (111,570 ) 49,930 Total assets $904,560 $871,134 Accounts payable Income taxes payable Salaries and wages payable Short-term notes payable Long-term notes payable Bonds payable Premium on bonds payable Common stock Paid-in capital in excess of par-common stock Retained earnings $21,830 $32,020 4,020 2,970 9,940 70,000 401,410 401,410 22,964 241,830 221,520 17,350 88,940 4,980 4,980 9,940 60,200 10,100 24,870 124,420

Solution

Answer 1. CULVER COMPANY Statement of Cash Flows (Direct Method) For the Year ended Dec 31, 2017 Cash Flow From Operating Activities Cash Receipts Cash recd from Cutomers 1,155,820.00 Dividend Revenue           2,410.00     1,158,230.00 Cash Payments Cash Paid to Suppliers    (763,840.00) Cash Paid For Operating Exp.    (228,656.00) Cash Paid for I Tax      (38,250.00) Cash paid for Interest Expense      (64,204.00) (1,094,950.00) Cash Flow from Operating Activities           63,280.00 Cash flow from Investing Activities Sale of Investments - $8,190 + $3,990        12,180.00 Sale of Land - $49,490 + $8,030        57,520.00 Purchase of Equipment    (119,680.00) Cash Flow used from Investing activities         (49,980.00) Cash Flow from Financing Activities Dividends Paid      (25,320.00) Payment of Long Term Notes Payable        (9,800.00) Proceeds from Issue of Common Stock        27,830.00 Cash Flow used from Financing Activities           (7,290.00) Net Increase / (Decrease) in Cash             6,010.00 Cash Beginning Balance - Dec 31, 2016             4,020.00 Cash Ending Balance - Dec 31, 2017           10,030.00 Calculation of Cash Recd. From Customers Sales Revenue    1,163,310.00 Add: Op. Accounts Receivables - Dec 31, 2016          12,860.00 Total Due to Customers    1,176,170.00 Less: Cls. Accounts Receivable - Dec 31, 2017        (20,350.00) Cash recd from Customers    1,155,820.00 Calculation of cash Paid to Suppliers Cost of Goods Sold        746,680.00 Add: Closing Inventory as on Dec 31,2017                41,710 Balance              788,390 Less: opening Inventory - Dec 31, 2016              (34,740) Purchases made during the year              753,650 Add: Opening Accounts Payable - Dec 31, 2016                32,020 Total amount Due              785,670 Less: Closing Accounts Payable - Dec 31, 2017              (21,830) Cash Paid to Suppliers              763,840 Calculation of Cash paid for Opearting Exp Operating Exp.        279,710.00 Less: Dep. On Plant & Equipment        (43,020.00) Balance        236,690.00 Add: Salaries & Wages Payable - Dec 31, 2016                  2,970 Add: Prepaid Rent - Dec 31, 2017                  3,020 Add: Prepaid Insurance - Dec 31, 2017                  2,100 Add: Supplies - Dec 31, 2017                      990 Total Expenses Due              245,770 Less: Salaries & Wagaes Payable - Dec 31, 2017                (4,980) Less: Prepaid Rent - Dec 31, 2016              (11,970) Less: Supplies - Dec 31, 2016                      (74) Less: Prepaid Insurance - Dec 31, 2016                      (90) Cash Paid for Operating Expenses              228,656 Calculation of Cash paid for Income Tax Income Tax Expenses          39,210.00 Add: Tax Payable - Dec 31, 2016            4,020.00 Balance          43,230.00 Less: Tax Payable - Dec 31, 2017          (4,980.00) Cash paid for Income Tax          38,250.00 Cash paid for Interest Expense Interest Expense          51,340.00 Add: Decrease in Bonds premium          12,864.00 Cash paid for Interest Expense          64,204.00 Answer 2. Reconciliation Schedule Net Income           60,800.00 Adjustments ro Reconcile Net Income to Net Cash Provide by Operating Activities: Depreciation / Amortization expense        43,020.00 Gain on Sale of Land        (8,030.00) Gain on sale of Short Term Investments        (3,990.00) Amortization of Bond Premium      (12,864.00) Increase in Accounts Receivable        (7,490.00) Increase in Inventory        (6,970.00) Decrease in Prepaid Rent           8,950.00 Increase in Prepaid Insurance        (2,010.00) Increase in Supplies            (916.00) Increase in Accounts Payable      (10,190.00) Increase in Income Tax Payable              960.00 Increase in Salaries & Wages Payable           2,010.00 Total Adjustments             2,480.00 Cash Flow from Operating Activities           63,280.00