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Issa Manufacturing Company was started on January 1, 2014, when it acquired $88,000 cash by issuing common stock. Issa immediately purchased office furniture and manufacturing equipment costing $9,200 and $31,600, respectively. The office furniture had a seven-year useful life and a zero salvage value. The manufacturing equipment had a $3,200 salvage value and an expected useful life of four years. The company paid $11,000 for salaries of administrative personnel and $15,900 for wages to production personnel. Finally, the company paid $12,690 for raw materials that were used to make inventory. All inventory was started and completed during the year. Issa completed production on 4,300 units of product and sold 3,310 units at a price of $16 each in 2014. (Assume that all transactions are cash transactions.)
Determine the amount of total assets that would appear on the December 31, 2014, balance sheet. (Round your answer to the nearest dollar amount.)
Determine the amount of net cash flow from operating activities that would appear on the December 31, 2014 statement of cash flows. (List cash outflow as negative amount.)
Determine the amount of net cash flow from investing activities that would appear on the December 31, 2014 statement of cash flows. (List cash outflow as negative amount.)
Expert Answer
| working | |
| Cash | |
| Issue of common stock | $88,000 |
| Purchase of Offce furniture | -9200 |
| Purchase of Equipment | -31600 |
| Payment of salaries of administrative personnel | -11000 |
| Payment of wages | -15900 |
| Payment of raw material | -12690 |
| Cash sales (3310*16) | 52960 |
| Ending balance of cash | $60,570 |
| Inventory (12690+15900+7100)/4300*(4300-3310) | 8217 |
| (Raw mat+direct labor+dep on equipment)/No. of units produced*No of units in ending inevntory | |
| Office Furniture, net | |
| Purchase price | 9200 |
| Less; depreciation 9200/7 | 1314 |
| Office Furniture, net | 7886 |
| Equipment, net | |
| Purchase price | 31600 |
| Less; depreciation (31600-3200)/4 | 7100 |
| Equipment, net | 24500 |
| Total Assets | Amt |
| Cash | $60,570 |
| Inventory | 8217 |
| Equipment, net | 24500 |
| Office Furniture, net | 7886 |
| ans 1 Total Assets | $101,173 |
| Ans 2 | |
| net cash flow from operating activities | |
| Cash sales (3310*16) | 52960 |
| Payment of salaries of administrative personnel | -11000 |
| Payment of wages | -15900 |
| Payment of raw material | -12690 |
| net cash flow from operating activities | 13370 |
| ans 3 | |
| net cash flow from Investing activities | |
| Purchase of Offce furniture | -9200 |
| Purchase of Equipment | -31600 |
| net cash flow from Investing activities | -40800 |
