Accounts receivable
increase
$14,000,000
Sales
$53,000,000
Cash
$39,000,000
Cash
$39,000,000
Accounts receivable
$14,000,000
Sales
$53,000,000
Accounts receivable
increase
$11,000,000
Sales
$37,000,000
Cash
$26,000,000
Cash
$26,000,000
Accounts receivable
$11,000,000
Sales
$37,000,000
Record net effect of selling and collection activities
Record net effect of selling and collection activities
Inventory
increased
$5,500,000
Accounts payable
increased
$4,700,000
COGS
$33,000,000
Cash
$33,800,000
Inventory
$5,500,000
COGS
$33,000,000
Accounts payable
$4,700,000
Cash
$33,800,000
Inventory
increased
$6,600,000
Accounts payable
increased
$4,900,000
COGS
$58,000,000
Cash
$59,700,000
Inventory
$6,600,000
COGS
$58,000,000
Accounts payable
$4,900,000
Cash
$59,700,000
Record net effect of merchandise purchases
Record net effect of merchandise purchases
issued
9%
1-Jan
face value
$120,000,000
7/1/2024
price
$118,000,000
market yield
10%
interest semi-annual
Interest expense
$5,900,000
Discount on bonds payable
$500,000
Cash
$5,400,000
Cash inflow from financing activities
$118,000,000
cash outflows from operating activities
($5,400,000)
issued
9%
1-Jan
face value
$380,000,000
7/1/2024
price
$370,000,000
market yield
10%
interest semi-annual
Interest expense
$18,500,000
Discount on bonds payable
$1,400,000
Cash
$17,100,000
Cash inflow from financing activities
$370,000,000
cash outflows from operating activities
($17,100,000)
Record interest payment at Dec 31,2024
Cash flow-indirect method
Record interest payment at Dec 31,2024
Cash flow-indirect method
net income
$84,500,000
depr expense
$1,800,000
sale of equipment
loss
$3,300,000
accounts receivable
increase
$2,800,000
accounts payable
increase
$3,800,000
inventory
increase
$2,800,000
net income
$84,500,000
depreciation expense
$1,800,000
loss on sale of equipment
$3,300,000
accounts payable
$3,800,000
Account receivable
($2,800,000)
increase in inventory
($2,800,000)
Net cash flows from operating activities
$87,800,000
net income
$96,000,000
depr expense
$2,500,000
sale of equipment
loss
$1,600,000
accounts receivable
increase
$1,400,000
accounts payable
increase
$2,400,000
inventory
increase
$3,400,000
net income
$96,000,000
depreciation expense
$2,500,000
loss on sale of equipment
$1,600,000
accounts payable
$2,400,000
Account receivable
($1,400,000)
increase in inventory
($3,400,000)
Net cash flows from operating activities
$97,700,000
changes in operating assets and liabilities
cash flow from operating activities
adjustment for noncash effects
changes in operating assets and liabilities
cash flow from operating activities
adjustment for noncash effects
1/1/2024
bought
20%
12/31/2024
net income
$365,000,000
during 2024
declared and paid
$73,000,000
PURCHASE
Investment in Chen Construction shares
$730,000,000
Cash
NET INCOME
Investment in Chen Construction shares
$146,000,000
Investment revenue
DIVIDENDS
Cash
$14,600,000
Investment in Chen Construction shares
Operating activities
$14,600,000
Investing activities
($730,000,000)
Financing activities
$0
1/1/2024
bought
20%
12/31/2024
net income
$320,000,000
during 2024
declared and paid
$64,000,000
PURCHASE
Investment in Chen Construction shares
$640,000,000
Cash
NET INCOME
Investment in Chen Construction shares
$64,000,000
Investment revenue
DIVIDENDS
Cash
$12,800,000
Investment in Chen Construction shares
Operating activities
$12,800,000
Investing activities
($640,000,000)
Financing activities
$0
common stock
$730,000,000
dividends
$730,000,000
$146,000,000
$14,600,000
common stock
$640,000,000
dividends
$640,000,000
$64,000,000
$12,800,000
Statement of Retained Earnings
Retained earnings, Jan 1
$250
Add:
Net income
$62
Deduct:
Cash Dividend
($19)
Stock Dividend
($22)
1 million shares of $1 par common stock
Property Dividend
($18)
short-term investment
Sale of treasury stock
($8)
cost $40 millon
Retained earnings, Dec 31
$245
Statement of Retained Earnings
Retained earnings, Jan 1
$290
Add:
Net income
$56
Deduct:
Cash Dividend
($21)
Stock Dividend
($28)
1 million shares of $1 par common stock
Property Dividend
($27)
short-term investment
Sale of treasury stock
($8)
cost $62 millon
Retained earnings, Dec 31
$262
Net income
$62
Retained earnings
$62
$1
Retained earnings
$19
$40
Cash
$19
Retained earnings
$22
Common stock
$1
Paid-in capital-excess of par
$21
Retained earnings
$18
Short-term investments
$18
Retained earnings
$8
Cash
$32
Treasury stock
$40
Net income
$56
Retained earnings
$56
$1
Retained earnings
$21
$62
Cash
$21
Retained earnings
$28
Common stock
$1
Paid-in capital-excess of par
$27
Retained earnings
$27
Short-term investments
$27
Retained earnings
$8
Cash
$54
Treasury stock
$62
Record payment of cash dividend
Record issuance of stock dividend
Record issuance of property dividend
Record sale of treasury shares
Record closing entry
Record payment of cash dividend
Record issuance of stock dividend
Record issuance of property dividend
Record sale of treasury shares
Record closing entry
sales
$271,700
cost of goods sold
$168,800
gross margin
$102,900
salaries expense
$35,000
insurance expense
$16,900
depreciation expense
$9,000
depletion expense
$3,400
interest expense
$10,400
$74,700
gains and losses:
gain on sale of equipment
$19,000
loss on sale of land
$6,400
income before tax
$40,800
income tax expense
$20,400
net income
$20,400
Cash flows from operating activies:
cash received from customers
$225,000
cash paid to suppliers
$158,000
cash paid to employees
$32,000
cash paid for interest
$9,500
cash paid for insurance
$13,400
cash paid for income tax
$10,600
net cash flows from operating activities
$1,500
sales
$280,200
cost of goods sold
$175,400
gross margin
$104,800
salaries expense
$38,600
insurance expense
$17,500
depreciation expense
$5,500
depletion expense
$4,200
interest expense
$11,100
$76,900
gains and losses:
gain on sale of equipment
$22,000
loss on sale of land
$6,700
income before tax
$43,200
income tax expense
$21,600
net income
$21,600
Cash flows from operating activies:
cash received from customers
$240,000
cash paid to suppliers
$164,000
cash paid to employees
$35,000
cash paid for interest
$9,800
cash paid for insurance
$13,700
Income statement
Income statement
cash paid for income tax
$11,200
net cash flows from operating activities
$6,300
Reconciliation of net income
Cash
Cash flows from operating activities
Accounts receivable
net income
$20,400
Adjustments for noncash effects
depreciation expense
$9,000
Cost of goods sold
depletion expense
$3,400
Inventory
gain on sale of equipment
($19,000)
loss on sale of land
$6,400
Changes in operating assets and liabilities
Salaries expense
increase in accounts receivable
($46,700)
Salaries payable
increase in accounts payable
$10,800
increase in salaries payable
$3,000
decrease in prepaid insurance
$3,500
Insurance expense
increase in interest payable
$900
increase in income tax payable
$9,800
Net cash flows from operating activities
$1,500
Interest expense
Income tax expense
Reconciliation of net income
Cash
Cash flows from operating activities
Accounts receivable
net income
$21,600
Adjustments for noncash effects
depreciation expense
$5,500
Cost of goods sold
depletion expense
$4,200
Inventory
gain on sale of equipment
($22,000)
loss on sale of land
$6,700
Changes in operating assets and liabilities
Salaries expense
increase in accounts receivable
($40,200)
Salaries payable
increase in accounts payable
$11,400
increase in salaries payable
$3,600
decrease in prepaid insurance
$3,800
Insurance expense
increase in interest payable
$1,300
increase in income tax payable
$10,400
Net cash flows from operating activities
$6,300
Interest expense
Income tax expense
$225,000
$46,700
Sales
$271,700
$168,800
$0
Accounts payable
$10,800
Cash
$158,000
$35,000
$3,000
Cash
$32,000
$16,900
Prepaid insurance
$3,500
Cash
$13,400
$10,400
Interest payable
$900
Cash
$9,500
$20,400
Income tax payable
$9,800
Cash
$10,600
$240,000
$40,200
Sales
$280,200
$175,400
$0
Accounts payable
$11,400
Cash
$164,000
$38,600
$3,600
Cash
$35,000
$17,500
Prepaid insurance
$3,800
Cash
$13,700
$11,100
Interest payable
$1,300
Cash
$9,800
$21,600
Income tax payable
$10,400
Cash
$11,200
Net loss
$4,380
depreciation expense
$6,150
increase in salaries payable
$430
decrease in accounts receivable
$1,725
increase in inventory
$2,000
amortization of patent
$430
reduction in discount on bonds
$330
Reconciliation of net income
net loss
($4,380)
depreciation expense
$6,150
amortization of patent
$430
increase in salaries payable
$430
decrease in accounts receivable
$1,725
increase in inventory
($2,000)
decrease in discount on bonds
$330
Net cash flows from operating activities
$2,685
Net loss
$4,350
depreciation expense
$6,320
increase in salaries payable
$515
decrease in accounts receivable
$2,050
increase in inventory
$2,250
amortization of patent
$470
reduction in discount on bonds
$370
Reconciliation of net income
net loss
($4,350)
depreciation expense
$6,320
amortization of patent
$470
increase in salaries payable
$515
decrease in accounts receivable
$2,050
increase in inventory
($2,250)
decrease in discount on bonds
$370
Net cash flows from operating activities
$3,125
Changes in operating assets and liabilities
Cash flows from operating activities
Changes in operating assets and liabilities
Adjustments for noncash effects
Cash flows from operating activities
Adjustments for noncash effects
Assets
2024
2023
Revenues
Cash
$405
$245
Sales revenue
Accounts receivable
$350
$190
Gain on sale of land
Inventory
$500
$275
Expenses
Land
$500
$450
Cost of goods sold
Building
$900
$900
Depreciation expense-building
Accumulated Depr
($200)
($180)
Depreciation expense-equipment
Equipment
$2,500
$2,150
Loss on sale of equipment
Accumulated Depr
($325)
($300)
Amoritization of patent
Patent
$1,000
$1,150
Operating expenses
$5,630
$4,880
Net income
Liabilities
Accounts payable
$600
$400
Accrued liabilites
$150
$130
Lease Liability-land
$130
$0
Shareholders' Equity
Common Stock
$3,100
$3,000
Paid-in capital-excess of par
$750
$700
Retained earnings
$900
$650
$5,630
$4,880
Comparative Balance Sheet
Income Statement
Annual payments on finance lease liability
Equipment cost sold-90% depreciation
Reductions in stock dividends
Reductions in cash dividends
Assets
2024
2023
Revenues
Cash
$570
$400
Sales revenue
Accounts receivable
$730
$380
Gain on sale of land
Inventory
$880
$445
Expenses
Land
$750
$685
Cost of goods sold
Building
$900
$900
Depreciation expense-building
Accumulated Depr
($250)
($235)
Depreciation expense-equipment
Equipment
$3,450
$3,290
Loss on sale of equipment
Accumulated Depr
($364)
($320)
Amoritization of patent
Patent
$1,900
$2,000
Operating expenses
$8,566
$7,545
Net income
Liabilities
Accounts payable
$980
$680
Accrued liabilites
$340
$265
Lease Liability-land
$130
$0
Shareholders' Equity
Common Stock
$3,700
$3,500
Paid-in capital-excess of par
$800
$755
Retained earnings
$2,616
$2,345
$8,566
$7,545
Comparative Balance Sheet
Income Statement
Annual payments on finance lease liability
Equipment cost sold-90% depreciation
Reductions in stock dividends
Reductions in cash dividends
Cash flows from operating activities
$2,555
Cash inflows:
$30
$2,585
from customers
$2,395
$800
$20
Cash outflows:
$160
to suppliers of goods
($825)
$10
for operating expenses
($580)
$150
$600
$1,740
Net cash flows from operating activities
$990
$845
Cash flows from investing activities
purchase of equipment
($500)
$20
sale of land
$130
$150
sale of equipment
$5
$150
$445
Net cash flows from investing activities
($365)
Cash flows from financing activities
payment on lease liability
($20)
payment on dividends
($445)
Net cash flows from financing activities
($465)
Net increase (decrease) in cash
$160
Cash balance, Jan 1
$245
Cash balance, Dec 31
$405
Noncash investing and financing activities
acquired land
$150
Income Statement
Annual payments on finance lease liability
Statement of Cash Flows
Cash flows from operating activities
$3,143
Cash inflows:
$85
$3,228
from customers
$2,793
$1,180
$15
Cash outflows:
$692
to suppliers of goods
($1,315)
$25
for operating expenses
($275)
$100
$350
$2,362
Net cash flows from operating activities
$1,203
$866
Cash flows from investing activities
purchase of equipment
($880)
$20
sale of land
$170
$720
sale of equipment
$47
$245
$350
Net cash flows from investing activities
($663)
Cash flows from financing activities
payment on lease liability
($20)
payment on dividends
($350)
Net cash flows from financing activities
($370)
Net increase (decrease) in cash
$170
Cash balance, Jan 1
$400
Cash balance, Dec 31
$570
Noncash investing and financing activities
acquired land
$150
Income Statement
Statement of Cash Flows
Annual payments on finance lease liability
Balance Sheet
2023
2024
Assets
Debits
Credits
Cash
$245
$160
$405
Accounts Receivable
$190
$160
$350
Inventory
$275
$225
$500
Land
$450
$150
$100
$500
Building
$900
$900
Accumulated Depr
($180)
$20
($200)
Equipment
$2,150
$500
$150
$2,500
Accumulated Depr
($300)
135
$
$160
($325)
Patent
$1,150
$150
$1,000
$4,880
$5,630
Liabilities
Accounts payable
$400
$200
$600
Accrued expenses
$130
$20
$150
Lease liability-land
$0
$20
$150
$130
Shareholders' Equity
Common Stock
$3,000
$100
$3,100
Paid-in capital-excess of par
$700
$50
$750
Retained earnings
$650
$150
$845
$445
$900
$4,880
$5,630
Revenues
Sales revenue
$2,555
$2,555
Gain on sales of land
$30
$30
Expenses
Cost of goods sold
$800
($800)
Depreciation exp-building
$20
($20)
Depreciation exp-equipment
$160
($160)
loss on sale of equipment
$10
($10)
Amortization expense
$150
($150)
Operating expenses
$600
($600)
Net income
$845
$845
Operating activities
Cash inflows:
from customers
$2,395
Cash outflows:
to suppliers of goods
$825
for operating expenses
$580
Net cash flows
$990
Investing activities
Purchase of equipment
$500
sale of land
$130
sale of equipment
$5
Changes
Spreadsheet for Statement of Cash Flows
Income Statement
Statement of Cash Flows
Net cash flows
($365)
Financing activities
payment on lease liability
$20
payment of dividends
$445
Net cash flows
($465)
Net increase in cash
$160
$160
$7,060
$7,060
Balance Sheet
2023
2024
Assets
Debits
Credits
Cash
$400
$170
$570
Accounts Receivable
$380
$350
$730
Inventory
$445
$435
$880
Land
$685
$150
$85
$750
Building
$900
$900
Accumulated Depr
($235)
$15
($250)
Equipment
$3,290
$880
$720
$3,450
Accumulated Depr
($320)
648
$
$692
($364)
Patent
$2,000
$100
$1,900
$7,545
$8,566
Liabilities
Accounts payable
$680
$300
$980
Accrued expenses
$265
$75
$340
Lease liability-land
$0
$20
$150
$130
Shareholders' Equity
Common Stock
$3,500
$200
$3,700
Paid-in capital-excess of par
$755
$45
$800
Retained earnings
$2,345
$245
$866
$350
$2,616
$7,545
$8,566
Revenues
Sales revenue
$3,143
$3,143
Gain on sales of land
$85
$85
Expenses
Cost of goods sold
$1,180
($1,180)
Depreciation exp-building
$15
($15)
Depreciation exp-equipment
$692
($692)
loss on sale of equipment
$25
($25)
Amortization expense
$100
($100)
Operating expenses
$350
($350)
Net income
$866
$866
Operating activities
Cash inflows:
from customers
$2,793
Spreadsheet for Statement of Cash Flows
Statement of Cash Flows
Changes
Income Statement
Cash outflows:
to suppliers of goods
$1,315
for operating expenses
$275
Net cash flows
$1,203
Investing activities
Purchase of equipment
$880
sale of land
$170
sale of equipment
$47
Net cash flows
($663)
Financing activities
payment on lease liability
$20
payment of dividends
$350
Net cash flows
($370)
Net increase in cash
$170
$170
$9,486
$9,486
Sales
$148,000,000
Cost of goods sold
$89,000,000
Gross margin
$59,000,000
Salaries expense
$18,000,000
Insurance expense
$11,000,000
Depreciation expense
$4,000,000
Interest expense
$5,300,000
$38,300,000
Gains and losses:
Gain on sale of equipment
$10,000,000
Loss on sale of land
$1,000,000
Income before tax
$29,700,000
Income tax expense
$14,850,000
Net income
$14,850,000
Sales
$151,600,000
Cost of goods sold
$90,800,000
Gross margin
$60,800,000
Salaries expense
$21,600,000
Insurance expense
$13,600,000
Depreciation expense
$5,800,000
Interest expense
$6,800,000
$47,800,000
Gains and losses:
Gain on sale of equipment
$13,600,000
Loss on sale of land
$4,600,000
Income before tax
$22,000,000
Income tax expense
$11,000,000
Net income
$11,000,000
Income Statement
Income Statement
Net income
$14,850,000
Cash
Adjustments for noncash effects:
decrease in accounts receivable
$5,200,000
gain on sale of equipment
($10,000,000)
increase in inventory
($5,000,000)
increase in accounts payable
$8,000,000
Cost of goods sold
increase in salaries payable
$2,000,000
Inventory
depreciation expense
$4,000,000
decrease in bond discount
$2,650,000
decrease in prepaid insurance
$1,000,000
loss on sale of land
$1,000,000
increase in income tax payable
$5,000,000
Salaries expense
Net cash flows from operating activities
$28,700,000
Interest expense
Insurance expense
Income tax expense
Net income
$11,000,000
Cash
Adjustments for noncash effects:
decrease in accounts receivable
$5,800,000
gain on sale of equipment
($13,600,000)
increase in inventory
($6,800,000)
increase in accounts payable
$9,800,000
Cost of goods sold
increase in salaries payable
$3,800,000
Inventory
depreciation expense
$5,800,000
decrease in bond discount
$3,400,000
decrease in prepaid insurance
$2,800,000
loss on sale of land
$4,600,000
increase in income tax payable
$6,800,000
Salaries expense
Net cash flows from operating activities
$33,400,000
Reconciliation of Net Income
Reconciliation of Net Income
Interest expense
Insurance expense
Income tax expense
$153,200,000
Accounts receivable
$5,200,000
Sales revenue
$148,000,000
$89,000,000
$5,000,000
Accounts payable
$8,000,000
Cash
$86,000,000
$18,000,000
Salaries payable
$2,000,000
Cash
$16,000,000
$5,300,000
Discount on bonds payable
$2,650,000
Cash
$2,650,000
$11,000,000
Prepaid insurance
$1,000,000
Cash
$10,000,000
$14,850,000
Income tax payable
$5,000,000
Cash
$9,850,000
$157,400,000
Accounts receivable
$5,800,000
Sales revenue
$151,600,000
$90,800,000
$6,800,000
Accounts payable
$9,800,000
Cash
$87,800,000
$21,600,000
Salaries payable
$3,800,000
Cash
$17,800,000
Record received from customers
Record paid to suppliers
Record received from customers
Record paid to suppliers
Record paid to employees
Record paid for interest
Record paid to employees
Record paid for insurance
Record paid for income taxes
$6,800,000
Discount on bonds payable
$3,400,000
Cash
$3,400,000
$13,600,000
Prepaid insurance
$2,800,000
Cash
$10,800,000
$11,000,000
Income tax payable
$6,800,000
Cash
$4,200,000
Record paid for interest
Record paid for insurance
Record paid for income taxes
Cash flows from operating activities
cash received from customers
$153,200,000
cash paid to suppliers
($86,000,000)
cash paid to employees
($16,000,000)
cash paid for interest
($2,650,000)
cash paid for insurance
($10,000,000)
cash paid for income taxes
($9,850,000)
Net cash flows from operating activities
$28,700,000
Cash flows from operating activities
cash received from customers
$157,400,000
cash paid to suppliers
($87,800,000)
cash paid to employees
($17,800,000)
cash paid for interest
($3,400,000)
cash paid for insurance
($10,800,000)
cash paid for income taxes
($4,200,000)
Net cash flows from operating activities
$33,400,000
Assets
2024
2023
Cash
$55
$58
Accounts receivable
$89
$106
Allowance for uncollectible accounts
($24)
($4)
Prepaid expenses
$19
$16
Inventory
$132
$110
Long-term investment
$89
$50
Land
$98
$98
Buildings and equipment
$400
$270
Accumulated Depreciation
($137)
($108)
Patent
$25
$26
$746
$622
Liabilities
Accounts payable
$19
$42
Accrued liabilities
$4
$20
Notes payable
$48
$0
Lease liability
$122
$0
Bonds payable
$64
$132
Shareholders' Equity
Common Stock
$69
$50
Paid-in capital-excess of par
$261
$205
Retained earnings
$159
$173
$746
$622
Net income
$80
Annual lease payment-7 years
$8
Comparative Balance Sheets
Assets
2024
2023
Cash
$32
$39
Accounts receivable
$94
$115
Allowance for uncollectible accounts
($30)
($6)
Prepaid expenses
$25
$20
Inventory
$147
$130
Long-term investment
$74
$30
Land
$108
$108
Buildings and equipment
$432
$290
Accumulated Depreciation
($149)
($116)
Patent
$29
$31
$762
$641
Liabilities
Accounts payable
$23
$50
Accrued liabilities
$4
$24
Notes payable
$52
$0
Lease liability
$134
$0
Bonds payable
$69
$145
Shareholders' Equity
Common Stock
$73
$50
Paid-in capital-excess of par
$269
$205
Retained earnings
$138
$167
$762
$641
Net income
$88
Annual lease payment-7 years
$8
Comparative Balance Sheets
Cash flows from operating activities
Net income
$80
Adjustments for noncash activities
Depreciation expense
$29
Bad debt expense
$20
Amortization expense
$1
Changes in operating assets and liabilities
Decrease in accounts receivable
$17
Increase in inventory
($22)
Decrease in accounts payable
($23)
Increase in prepaid expenses
($3)
Decrease in accrued liability
($16)
Net cash flows from operating activities
$83
Cash flows from investing activities
Purchase of long-term investment
($39)
Net cash flows from investing activities
($39)
Cash flows from financing activities
Payment of lease liability
($8)
Issuance of notes payable
$48
Retirement of bonds payable
($68)
Sale of common stock
$75
Payment of dividends
($94)
Net cash flows from financing activities
($47)
Net increase (decrease) in cash
($3)
Cash balance, Jan 1
$58
Cash balance, Dec 31
$55
Noncash investing and financing activities
Acquired use of buildings by lease
$130
Statement of Cash Flows
Cash flows from operating activities
Net income
$88
Adjustments for noncash activities
Depreciation expense
$33
Bad debt expense
$24
Amortization expense
$2
Changes in operating assets and liabilities
Decrease in accounts receivable
$21
Increase in inventory
($17)
Decrease in accounts payable
($27)
Increase in prepaid expenses
($5)
Decrease in accrued liability
($20)
Net cash flows from operating activities
$99
Cash flows from investing activities
Purchase of long-term investment
($44)
Net cash flows from investing activities
($44)
Cash flows from financing activities
Payment of lease liability
($8)
Issuance of notes payable
$52
Retirement of bonds payable
($76)
Sale of common stock
$87
Payment of dividends
($117)
Net cash flows from financing activities
($62)
Net increase (decrease) in cash
($7)
Cash balance, Jan 1
$39
Cash balance, Dec 31
$32
Noncash investing and financing activities
Acquired use of buildings by lease
$142
Statement of Cash Flows
Balance sheet
2023
2024
Assets
Debit
Credit
Cash
$58
$3
$55
Accounts receivable
$106
$17
$89
Allowance for uncollectible accounts
($4)
$20
($24)
Prepaid expenses
$16
$3
$19
Inventory
$110
$22
$132
Long-term investment
$50
$39
$89
Land
$98
$98
Buildings and equipment
$270
$130
$400
Accumulated depreciation
($108)
$29
($137)
Patent
$26
$1
$25
$622
$746
Liabilities
Accounts payable
$42
$23
$19
Accrued liabilities
$20
$16
$4
Notes payable
$0
$48
$48
Lease liability
$0
$8
$130
$122
Bonds payable
$132
$68
$64
Shareholders' Equity
Common stock
$50
$19
$69
Paid-in capital-excess of par
$205
$56
$261
Retained earnings
$173
$94
$80
$159
$622
$746
Operating activities
Net income
$80
Adjustments for noncash effects
Depreciation expense
$29
Bad debt expense
$20
Amortiziation expense
$1
Decrease in accounts receivable
$17
Increase in inventory
$22
Decrease in accounts payable
$23
Increase in prepaid expenses
$3
Decrease in accrued liabilities
$16
Net cash flows
$83
Investing activities
Purchase of long-term investments
$39
Net cash flows
($39)
Financing activities
Payment on lease liability
$8
Issuance of notes payable
$48
Retirement of bonds payable
$68
Sale of common stock
$75
Payment of dividends
$94
Changes
Spreadsheet for Statement of Cash Flows
Statement of Cash Flows
Net cash flows
($47)
Net decrease in cash
$3
($3)
Totals
$676
$676
Balance sheet
2023
2024
Assets
Debit
Credit
Cash
$39
$7
$32
Accounts receivable
$115
$21
$94
Allowance for uncollectible accounts
($6)
$24
($30)
Prepaid expenses
$20
$5
$25
Inventory
$130
$17
$147
Long-term investment
$30
$44
$74
Land
$108
$108
Buildings and equipment
$290
$142
$432
Accumulated depreciation
($116)
$33
($149)
Patent
$31
$2
$29
$641
$762
Liabilities
Accounts payable
$50
$27
$23
Accrued liabilities
$24
$20
$4
Notes payable
$0
$52
$52
Lease liability
$0
$8
$142
$134
Bonds payable
$145
$76
$69
Shareholders' Equity
Common stock
$50
$23
$73
Paid-in capital-excess of par
$205
$64
$269
Retained earnings
$167
$117
$88
$138
$641
$762
Operating activities
Net income
$88
Adjustments for noncash effects
Depreciation expense
$33
Bad debt expense
$24
Amortiziation expense
$2
Decrease in accounts receivable
$21
Increase in inventory
$17
Decrease in accounts payable
$27
Increase in prepaid expenses
$5
Decrease in accrued liabilities
$20
Net cash flows
$99
Investing activities
Purchase of long-term investments
$44
Net cash flows
($44)
Financing activities
Payment on lease liability
$8
Changes
Statement of Cash Flows
Spreadsheet for Statement of Cash Flows
Issuance of notes payable
$52
Retirement of bonds payable
$76
Sale of common stock
$87
Payment of dividends
$117
Net cash flows
($62)
Net decrease in cash
$7
($7)
Totals
$770
$770
