Neraca komparatif Dakota Company per 31 Desember 2016 dan 2017 adalah sebagai

berikut :

Dakota Company
Comparative Balance Sheet
December 31, 2016 and 2017
Title 2017 2016
Assets :
Cash $ 140.350 $ 95.900
Account Receivable – Net 95.300 102.300
Inventory 165.200 157.900
Prepaid expense 6.240 5.860
Investment (Long-term) 35.700 84.700
Land 75.000 90.000
Building 375.000 260.000
Accum. Depreciation – Building 71.300 58.300
Machine and Equipment 428.300 428.300
Accum. Depr.- Machine-Equipment 148.500 138.000
Patent 58.000 65.000
Total Assets $ 1.159.290 $ 1.093.660

Liabilities and Stockholders Equity :

Account Payable $ 43.500 $ 46.700
Accrued Expense 14.000 12.500
Income Tax Payable 7.900 8.400
Dividends Payable 14.000 10.000
Hypotic Notes Payable 40.000 0
Bonds 150.000 250.000
Common Stock, Par $ 30 450.000 375.000
Additional Paid-in Capital – CS 66.250 41.250
Retained Earnings 373.640 349.810
Total Liab. and Stockholders Equity $ 1.159.290 $ 1.093.660
Sedangkan hasil operasi periode berjalan menunjukan data sebagai berikut :

Dakota Company
Income Statement
December 31, 2017
Title
Sales $ 1.100.000
Cost of Goods Sold 710.000
Gross Profit 390.000
Operating Expense :
Depreciation Expense $ 23.500
Amortization - Patent 7.000
Others Expense 196.000
Total Operating Expense $ 226.500
Operating Income $ 163.500
Others Income and Expense :
Interest Expense $ 26.000
Gain on Sale of Investment 11.000
Total Others Expense and Income $ 15.000
Net Income Before Income Tax $ 148.500
Income Tax 50.000
Net Income $ 98.500

Informasi tambahan yang berhubungan dengan data di atas adalah sebagai berikut :

a. Land senilai $ 15.000 dijual dengan harga $ 15.000

b. Hypotic Notes Payable yang diterbitkan sebesar $ 40.000
c. Building senilai $ 115.000 dibangun sendiri
d. Common Stock sebanyak 2.500 lembar diterbitkan pada nilai $ 40 untuk menukar
Bonds.
e. Cash dividends sebesar $ 74.670 diumumkan.

Diminta : Susunlah Cash Flow Statement untuk periode yang berakhir Dec.31, 2017.
Penyelesaian.

Dakota Company
Comparative Balance Sheet
December 31, 2016 and 2017

Title 2017 2016 Changes

Assets :
Cash $ 140.350 $ 95.900 $ 44.450
Account Receivable – Net 95.300 102.300 (7.000)
Inventory 165.200 157.900 7.300
Prepaid expense 6.240 5.860 380
Investment (Long-term) 35.700 84.700 (49.000)
Land 75.000 90.000 (15.000)
Building 375.000 260.000 115.000
Accum. Depreciation – Building 71.300 58.300 13.000
Machine and Equipment 428.300 428.300 -
Accum. Depr.- Machine-Equipment 148.500 138.000 10.500
Patent 58.000 65.000 7.000
Total Assets $ 1.159.290 $ 1.093.660 $ 65.630

Liab. and Stockholders Equity :

Account Payable $ 43.500 $ 46.700 $ (3.200)
Accrued Expense 14.000 12.500 1.500
Income Tax Payable 7.900 8.400 500
Dividends Payable 14.000 10.000 4.000
Hypotic Notes Payable 40.000 0 40.000
Bonds 150.000 250.000 100.000
Common Stock, Par $ 30 450.000 375.000 75.000
Additional Paid-in Capital – CS 66.250 41.250 25.000
Retained Earnings 373.640 349.810 23.830
Total Liab. and Stockholders Equity $ 1.159.290 $ 1.093.660 $ 65.630
1. Indirect Method.

Dakota Company
Cash Flow Statement
Ending Period Dec 31, 2016 and 2017
Description
Cash Flow From Operating Activities :
Net Income $ 98.500
Added :
Depreciation expense $ 23.500
Patent Amortization 7.000
Decreasing of Account Receivable 7.000
Increasing of actual expense 1.500
$ 39.000
$ 137.500
Deducted :
Increasing of Inventory $ 7.300
Increasing of Prepaid Expense 380
Decreasing of Income Tax 3.200
Decreasing of Account Payable 500
Gain From Sale of Investment 11.000
Net Cash Flow From Operating Activities $ 22.380
$ 115.120

Cash Flow From Investing Activities :

Cash From Sale of Investment $ 60.000
Cash From Sale of Land 15.000 $ 75.000
Cash for Development of Building 115.000
Net Cash Flow From Investing Activities ($ 40.000)
$ 75.120

Cash From Financing Activities :

Cash from Hypotic Notes Issuing $ 40.000
Cash for Dividend Payment 70.670
Net Cash Flow From Financing Activities $ 30.670
Net Increasing Cash Flow $ 44.450
Cash balance , Jan.1, 2017 $ 95.900
Cash balance , Dec. 1, 2017 $ 140.350

Noncash Financing :
Issuing Common Stock for retired Bonds $ 100.000
2. Direct Method.

Dakota Company
Cash Flow Statement
Ending Period Dec 31, 2016 and 2017
Description
Cash Flow From Operating Activities :
Cash received from customer (1) $ 1.107.000*
Deduct :
Cash payment for merchandise (2) $720.500*
Cash payment for operating expense (3) 194.880*
Cash payment for interest expense 26.000
Cash payment for income tax (4) 50.500*
Increasing of actual expenses $ 991.880
Net Cash Flow From Operating Activities $ 115.120

Cash Flow From Investing Activities :

Cash From Sale of Investment $ 60.000
Cash From Sale of Land 15.000 $ 75.000
Cash for Development of Building 115.000 ($ 40.000)
Net Cash Flow From Operating Activities $ 75.120

Cash From Financing Activities :

Cash from Hypotic Notes Issuing $ 40.000
Cash for Dividend Payment (5) 70.670* $ 30.670
Net Cash Flow From Financing Activities $ 44.450
Cash balance , Jan.1, 2017 $ 95.900
Cash balance , Dec. 1, 2017 $ 140.350

Noncash Financing :
Issuing Common Stock for retired Bonds $ 100.000

Computation :

1. $ 1.100.000 + $ 7.000 = $ 1.107.000

2. $ 710.000 + $ 3.200 + $ 7.300 = $ 720.500
3. $ 196.000 + $ 380 - $ 1.500 = $ 194.880
4. $ 50.000 + $ 500 = $ 50.500
5. $ 74.670 + $ 10.000 - $ 14.000 = $ 70.670
The comparative balance sheet of Winner’s Edge Sporting Goods, Incorporation for
December 31, 2017 and 2016 , is as follows :

Title Dec. 31, 2016 Dec. 31, 2017

Assets :
Cash $ 464,100 $ 395,800
Account Receivable 163,200 145,700
Inventories 395,000 367,900
Investments 0 120,000
Land 160,000 0
Equipment 695,500 575,500
Accumulated Depreciation 194,000 168,800
Total Assets $ 1,683,800 $ 1,436,900

Liabilities and Stockholders’ Equity :

Account Payable ( Merchandise Creditors) $ 228,700 $ 210,500
Accrued Expenses (Operating Expenses) 16,500 21,400
Dividends Payable 14,000 10,000
Common Stock, $ 10 Par 75,000 60,000
Paid-in Capital in Excess of Par – Com. Stock 265,000 175,000
Retained Earnings 1,084,600 960,000
Total Stockholders Equity $ 1,683,800 $ 1,436,900

The income statement for the year ended December 31, 2016 , is as follows :

Sales $ 1,580,500
Cost of Merchandise Sold 957,300
Gross Profit $ 623,200
Operating Expenses :
Depreciation Expense $ 26,000
Other Operating Expense 329,400
Total Operating Expenses $ 355,400
Operating Income $ 267,800
Other Income :
Gain on Sal of Investment 12,000
Income Before Income Tax $ 279,800
Income Tax 99,200
Net Income $ 180,600

The following additional informationwas taken from the records :

a. The investment were sold for $ 132,000 cash.

b. Equipment and Land were acquired for cash
c. There were no disposal of Equipment during the year.
d. The Common Stock was issued for cash
e. There was a $ 56,000 debit to Retained Earning for cash dividends declared.
Instructions : Prepare a Statement of Cash Flows, using the Direct Method of presenting
cash flows from Operating Activities.

Answer :

WES GOODS, INC

Statement of Cash Flows
For the year ended December 31, 2016
Cash flows from operating activities:
Cash received from customers 1) $1,563,000
Deduc :Cash payments for merchandise 2) $966,200
Cash payments for operating expenses 3) 334,300
Cash payments for income tax 99,200 1,399,700
Net cash flow from operating activities $163,300

Cash flows from investing activities:

Cash received from sale of investments $ 132,000
Less: Cash paid for land $160,000
Cash paid for equipment 120,000 280,000
Net cash flow used for investing activities (148,000)

Cash flows from financing activities:

Cash received from sale of common stock $ 105,000
Less: Cash paid for dividends 4) 52,000
Net cash flow provided by financing activities 53,000
Increase in cash $68,300
Cash at the beginning of the year 395,800
Cash at the end of the year $ 464,100
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Alternative. (Indirect Method).

Flows from Operating Activities:

Net income, per income statement $ 180,600
Add: Depreciation $ 26,000
Increase in accounts payable 18,200 44,200
$ 224,800
Deduct: Increase in accounts receivable $ 17,500
Increase in inventories 27,100
Gain on sale of investments 12,000
Decrease in accrued expenses 4,900 61,500
Net cash flow from operating activities $163,300
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Computations:
1. Sales $ 1,580,500
Deduct increase in accounts receivable 17,500
Cash received from customers $1,563,000

2 Cost of merchandise sold $957,300

Add increase in inventories 27,100
$984,400
Deduct increase in accounts payable 18,200
Cash payments for merchandise $966,200

3 Operating expenses other than depreciation $329,400

Add decrease in accrued expenses 4,900
Cash payments for operating expenses $334,300

4 Cash dividends declared 56,000

Deduct increase in dividends payable 4,000
Cash paid for dividends 52,000
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