USA: +1 725-224-8795 
Sign in
Comparative balance sheet accounts of Flint Inc. are presented below.
| FLINT INC. COMPARATIVE BALANCE SHEET ACCOUNTS AS OF DECEMBER 31, 2017 AND 2016 |
||||
| December 31 | ||||
| Debit Accounts | 2017 | 2016 | ||
| Cash | $42,200 | $33,700 | ||
| Accounts Receivable | 70,800 | 60,200 | ||
| Inventory | 30,000 | 24,300 | ||
| Equity investments | 22,400 | 38,300 | ||
| Machinery | 30,100 | 18,800 | ||
| Buildings | 67,000 | 56,100 | ||
| Land | 7,500 | 7,500 | ||
| $270,000 | $238,900 | |||
| Credit Accounts | ||||
| Allowance for Doubtful Accounts | $2,200 | $1,500 | ||
| Accumulated Depreciation—Machinery | 5,700 | 2,300 | ||
| Accumulated Depreciation—Buildings | 13,600 | 9,000 | ||
| Accounts Payable | 35,100 | 24,700 | ||
| Accrued Payables | 3,300 | 2,600 | ||
| Long-Term Notes Payable | 21,200 | 31,000 | ||
| Common Stock, no-par | 150,000 | 125,000 | ||
| Retained Earnings | 38,900 | 42,800 | ||
| $270,000 | $238,900 | |||
Additional data (ignoring taxes):
Don't use plagiarized sources. Get Your Custom Essay on
Question & Answer: Comparative balance sheet accounts of Flint Inc. are presented below……
GET AN ESSAY WRITTEN FOR YOU FROM AS LOW AS $13/PAGE
| 1. | Net income for the year was $42,400. | |
| 2. | Cash dividends declared and paid during the year were $21,300. | |
| 3. | A 20% stock dividend was declared during the year. $25,000 of retained earnings was capitalized. | |
| 4. | Equity investments (level of ownership is less than 20%) that cost $24,800 were sold during the year for $28,500. No unrealized gains and losses were recorded on these investments in 2017. | |
| 5. | Machinery that cost $3,800, on which $750 of depreciation had accumulated, was sold for $2,250. |
Flint’s 2017 income statement follows (ignoring taxes).
| Sales revenue | $541,000 | ||||
| Less: Cost of goods sold | 381,800 | ||||
| Gross margin | 159,200 | ||||
| Less: Operating expenses (includes $8,750 depreciation and $5,735 bad debts) | 119,700 | ||||
| Income from operations | 39,500 | ||||
| Other: Gain on sale of investments | $3,700 | ||||
| Loss on sale of machinery | (800 | ) | 2,900 | ||
| Net income | $42,400 |
(a) Compute net cash flow from operating activities using the direct method. (Enter negative amounts using either a negative sign preceding the number e.g. -45 or parentheses e.g. (45).)
| Net cash flow from operating activities | $ |
(b) Prepare a statement of cash flows using the indirect method.
Expert Answer
| FLINT INC | ||
| Statement of Cash Flows (Direct Method) | ||
| For the Year ended Dec 31, 2017 | ||
| Cash Flow From opearting Activities | ||
| Cash recd from Cutomers | 525,365 | |
| Cash Paid to Suppliers | (377,100) | |
| Cash Paid For Operating Exp. | (104,515) | |
| Cash Flow from Operating Activities | 43,750 | |
| Cash flow from Investing Activities | ||
| Purchase of Machinery | (15,100) | |
| Purchase of Investments | (8,900) | |
| Sale of machinery | 2,250 | |
| Sale of Investments | 28,500 | |
| Purchase of Building | (10,900) | |
| Cash Flow / (used) from Investing activities | (4,150) | |
| Cash Flow from Financing Activities | ||
| Payment of Cash Dividends | (21,300) | |
| Payment of Long Term Notes | (9,800) | |
| Cash Flow from Financing Activities | (31,100) | |
| Net Increase / (Decrease) in Cash | 8,500 | |
| Cash & Cash Equivalent Balance – Dec 31, 2016 | 33,700 | |
| Cash & Cash Equivalent Balance – Dec 31, 2017 | 42,200 | |
| Calculation of cash Paid to Suppliers | |
| Cost of Goods Sold | 381,800 |
| Add: Increase in Inventory | 5,700 |
| Purchases made during the year | 387,500 |
| Less: Increase in Accounts Payable | (10,400) |
| Cash payment to Suppliers | 377,100 |
| Calculation of Cash paid for Opearting Exp | |
| Operating Exp. | 119,700 |
| Less: Dep. On Plant & Equipment | (8,750) |
| Less: Bad Debts | -5735 |
| Balance | 105,215 |
| Less: Increase in Accrued Payables | (700) |
| Cash paid for Operating Exp. | 104,515 |
| Machinery | |||
| To Balance B/f | 18,800 | By Acc. dep. | 750 |
| By Cash | 2,250 | ||
| To Purch. Of Mach. | 15,100 | By Loss on sale of mach | 800 |
| (Bal. Fig.) | |||
| By Balance C/f | 30,100 | ||
| 33,900 | 33,900 | ||
| Accumulated Dep. – Machinery | |||
| To Mach. | 750 | By Balance b/f | 2,300 |
| By Dep. Exp. | 4,150 | ||
| To Balance c/f | 5,700 | ||
| 6,450 | 6,450 | ||
| Accounts receivable | |||
| To Balance B/f | 60,200 | By Allowance for Doubtful Accounts | 5,035 |
| To sales | 541,000 | By Cash recd. | 525,365 |
| By Balance c/f | 70,800 | ||
| 601,200 | 601,200 | ||
| Allowance for Doubtful Accounts | |||
| To accounts Receivable | 5,035 | By Balance B/f | 1,500 |
| By Bad debts | 5,735 | ||
| To Balance c/f | 2,200 | ||
| 7,235 | 7,235 | ||
| FLINT INC | ||
| Statement of Cash Flows (Indirect Method) | ||
| For the Year ended Dec 31, 2017 | ||
| Cash Flow from opearating activities: | ||
| Net Income | 42,400 | |
| Add/(Less) non cash effects on operating activities | ||
| Depreciation expense | 8,750 | |
| Gain on Sales of Investments | (3,700) | |
| Loss on Sale of Machinery | 800 | |
| Increase in Accounts Receivables | (10,600) | |
| Increase in Inventory | (5,700) | |
| Increase in Allowance for Doubtful Accounts | 700 | |
| Increase in Accounts Payables | 10,400 | |
| Increase in Accrued Payables | 700 | 1,350 |
| Net Cash provided by operating activities | 43,750 | |
| Cash flow from Investing Activities | ||
| Purchase of Machinery | (15,100) | |
| Purchase of Investments | (8,900) | |
| Sale of machinery | 2,250 | |
| Sale of Investments | 28,500 | |
| Purchase of Building | (10,900) | |
| Cash Flow / (used) from Investing activities | (4,150) | |
| Cash Flow from Financing Activities | ||
| Payment of Cash Dividends | (21,300) | |
| Payment of Long Term Notes | (9,800) | |
| Cash Flow from Financing Activities | (31,100) | |
| Net Increase / (Decrease) in Cash | 8,500 | |
| Cash & Cash Equivalent Balance – Dec 31, 2016 | 33,700 | |
| Cash & Cash Equivalent Balance – Dec 31, 2017 | 42,200 | |
