Accounting assignment for Michelle K

STATEMENT OF CASH FLOWS

Required: Prepare a properly formatted statement of cash flows for FYE 2017 for Taylor Inc. Look up on the internet what a properly formatted statement of cash flows looks like. In addition, answer the questions following the balance sheet and additional information.

	2017	2016
Assets
Current Assets
Cash	$14,000	$9,000
Accounts Receivable	325,000	345,000
Inventory Office Supplies	175,000 13,200	160,000 3,300
Prepaid Expenses	35,500	25,000
Total Current Assets	$562,700	$542,300
PP&E
Land	$410,000	$400,000
Building	750,000	700,000
Equipment	630,000	450,000
	$1,790,000	$1,550,000
Less: Accum Depr	($270,000)	($270,000)
Total PP&E	$1,520,000	$1,280,000
Total Assets	$2,082,700	$1,822,300
Liabilities
Current Liabilities
Accounts Payable	$112,000	$119,000
Interest Payable	2,000	4,800
Total Current Liabilities	$114,000	$120,500
Long Term Liabilities
Long Term N/P	130,000	30,000
Total Liabilities	$244,000	$153,800
Stockholders’ Equity
Common stock ($1 par)	$700,000	$600,000
APIC	578,700	368,500
Retained Earnings	560,000	700,000
Total SE	$1,838,700	$1,668,500
Total Liab and equity	$2,082,700	$1,822,300

Additional Info:

Dividends declared and paid in FYE 2017 was $75,000.

Land with a historical cost of $50,000 was sold for $15,000.

Land, Building and Equipment was purchased with cash. No building were disposed of during the year.

Equipment was sold that had an original cost of $75,500 and a book value of $13,000 for a $2,000 gain.

Land with an estimated market value of $25,000 was purchased in exchange of a $25,000 ten year note payable. No cash changed hands.

REQUIRED:

1) PREPARE A PROPERLY FORMATTED STATEMENT OF CASH FLOWS

2) ANSWER THE FOLLOWING QUESTIONS (10 POINTS EACH):

a. Assuming that 100,000 shares were issued in 2018. What was the average issue price?

b. Why do you subtract an increase in accounts receivable to net income/net loss in the operating section of the statement of cash flows?

c. Why do you add back a decrease in accounts receivable to net income/net loss in the operating section of the statement of cash flows?

d. What are the two ways to prepare the operating section of the statement of cash flows?

e. Which way of preparing the operating section of the statement of cash flows must be presented in the financial statements?