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Cash Flow Statement - Problem

The document provides financial information for Bolts Corporation, including comparative balance sheets and an income statement for the year ended December 31, 2018. It outlines the requirements to complete a cash flow statement using the indirect method and highlights noncash investing and financing transactions. Additional details include changes in assets, liabilities, and stockholders' equity, along with specific transactions affecting cash flows.

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67 views3 pages

Cash Flow Statement - Problem

The document provides financial information for Bolts Corporation, including comparative balance sheets and an income statement for the year ended December 31, 2018. It outlines the requirements to complete a cash flow statement using the indirect method and highlights noncash investing and financing transactions. Additional details include changes in assets, liabilities, and stockholders' equity, along with specific transactions affecting cash flows.

Uploaded by

the.ethereal.factor
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Cash Flow Statement – Practice Problem

You are given the balance sheet and income statement information for Bolts Corporation, as
well as some additional information. You are required to complete the cash flow statement
using the indirect method and indicate the noncash investing and financial transactions.

Bolts Corporation
Comparative Balance Sheets
for the year ended December 31, 2018, and 2017
2018 2017 Change
Assets
Cash $21,000 $54,000 -33,000
Accounts receivable (net) 421,000 480,000 -59,000
Inventory 310,000 340,000 -30,000
Prepaid expenses 17,000 15,000 2,000
Long term Investments 65,000 60,000 5,000
Land 350,000 300,000 50,000
Building 734,000 750,000 -16,000
Accumulated Depreciation -54,000 -50,000 -4,000
- Building
Equipment 680,000 460,000 220,000
Accumulated Depreciation -160,000 -120,000 -40,000
- Equipment
Patent 15,000 20,000 -5,000
Total assets $2,399,000 $2,309,000 90,000
Liabilities
Accounts payable $328,000 $335,000 -7,000
Accrued liabilities 171,000 170,000 1,000
Income taxes payable 22,000 34,000 -12,000
Bonds payable 410,000 700,000 -290,000
Long-term note payable 130,000 0 130,000
Total liabilities $1,061,000 $1,239,000 -178,000
Stockholders' Equity
Common stock $800,000 $600,000 200,000
Additional paid-in capital 152,000 152,000 0
Retained earnings 386,000 318,000 68,000
Total stockholders' equity $1,338,000 $1,070,000 268,000
Total liabilities and $2,399,000 $2,309,000 90,000
stockholders' equity
Income Statement for the year ended 31st Dec 2018
Sales 498,000
Less: Expenses
Cost of goods sold 130,000
Depreciation Expense 60,000
Administrative Expense 40,000
Selling Expense 15,000
Loss on sale of Building 8,000
Amortization of Patent 5,000
Total Expenses 258,000
Income before Income Taxes 240,000
Less: Income Tax Expense 97,000
Net Income 143,000

Additional Information:
1. Issued a long-term note payable in exchange for computer equipment for $130,000.
2. In addition to item 1 above, some more computer equipment was also purchased, but no
equipment was sold during the year.
3. Depreciation on equipment for 2018 was $40,000.
4. Stock Dividend was issued for $50,000
5. A Building costing $30,000 was sold. The accumulated depreciation related to the building
on the date of sale was $16,000.
Bolts Corporation
Cash Flow Statement
for the year ended December 31, 2018
Cash Flows from Operating Activities:
Profit Before Taxes
Adjustments to reconcile profits to net cash flows
from operating activities
Adjustments for:

Net Cash Flow from operating activities


Cash Flows from Investing Activities:
Due to:

Net Cash Flow from investing activities


Cash Flows from Financing Activities:
Due to:

Net Cash Flow from financing activities


Net Change in Cash
Beginning Balance
Ending Balance

Schedule of Noncash Investing & Financing transactions:

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