Swasey Company provided the following partial comparative balance sheets and the income statement for 20X2.
| Swasey Company |
| Comparative Balance Sheets |
| At December 31, 20X1 and 20X2 |
| 1 |
|
20X1 |
20X2 |
| 2 |
Current assets: |
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| 3 |
Cash |
$227,000.00 |
$657,500.00 |
| 4 |
Accounts receivable |
$753,000.00 |
$581,500.00 |
| 5 |
Inventories |
298,000.00 |
325,000.00 |
| 6 |
Long-term assets: |
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|
| 7 |
Plant and equipment |
2,196,000.00 |
2,160,000.00 |
| 8 |
Accumulated depreciation |
(1,190,000.00) |
(1,260,000.00) |
| 9 |
Land |
1,005,000.00 |
1,435,500.00 |
| 10 |
Total assets |
$3,289,000.00 |
$3,899,500.00 |
| 11 |
Current liabilities: |
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|
| 12 |
Wages payable |
$702,000.00 |
$517,000.00 |
| 13 |
Long-term liabilities: |
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|
| 14 |
Bonds payable |
0.00 |
390,000.00 |
| 15 |
Mortgage payable |
98,500.00 |
0.00 |
| 16 |
Total liabilities |
$800,500.00 |
$907,000.00 |
| 17 |
Stockholders’ equity: |
|
|
| 18 |
Common stock |
375,500.00 |
375,500.00 |
| 19 |
Paid-in capital in excess of par |
284,000.00 |
284,000.00 |
| 20 |
Retained earnings |
1,829,000.00 |
2,333,000.00 |
| 21 |
Total stockholders’ equity |
2,488,500.00 |
2,992,500.00 |
| 22 |
Total liabilities and stockholders’ equity |
$3,289,000.00 |
$3,899,500.00 |
| Swasey Company |
| Income Statement |
| For the Year Ended December 31, 20X2 |
| 1 |
Revenues |
$2,995,000.00 |
| 2 |
Gain on sale of equipment |
99,000.00 |
| 3 |
Cost of goods sold |
(1,924,000.00) |
| 4 |
Depreciation expense |
(268,000.00) |
| 5 |
Interest expense |
(9,500.00) |
| 6 |
Net income |
$892,500.00 |
During the year, Swasey Company sold equipment with a book value of $275,500 for $374,500 (original purchase cost of $473,500). New equipment was purchased.
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Required: |
1. Prepare a statement of cash flows for Swasey for 20X2. (Note: Use a minus sign to indicate any decreases in cash or cash outflows. Refer to the Amount Descriptions list provided for the exact wording of the answer choices for text entries.)
| Swasey Company |
| Statement of Cash Flows |
| For the Year Ended December 31, 20X2 |
| 1 |
Cash flows from operating activities: |
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| 2 |
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| 3 |
Add (deduct) adjusting items: |
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| 10 |
Cash flows from investing activities: |
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| 11 |
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| 12 |
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Cash flows from financing activities: |
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Refer to the list below for the exact wording of a label or an amount description within your Statement of Cash Flows.
| Amount Descriptions |
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| Add cost of goods sold |
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| Add interest expense |
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| Decrease in accounts receivable |
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| Decrease in wages payable |
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| Decrease in inventories |
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| Depreciation expense |
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| Gain on sale of equipment |
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| Increase in accounts receivable |
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| Increase in wages payable |
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| Increase in inventories |
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| Issuance of bonds payable |
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| Loss on sale of equipment |
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| Net cash from financing activities |
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| Net cash from investing activities |
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| Net cash from operating activities |
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| Net decrease in cash |
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| Net income |
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| Net increase in cash |
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| Net loss |
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| Payment of dividends |
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| Payment of mortgage |
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| Purchase of equipment |
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| Purchase of land |
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| Receipt of dividends |
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| Sale of equipment |
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