The net changes in the statement of financial position accounts of Solar Services, Inc. for the year 2016 are shown below: Account Debit Credit Cash $ 125,600 Accounts receivable 64,000 Allowance for doubtful 14,000 accounts Inventory 217,200 Prepaid expenses 30,000 Long-term investments Land 144,000 300,000 Buildings 600,000 Machinery Office equipment Accumulated depreciation: 100,000 28,000 Buildings 24,000 Machinery Office equipment Accounts payable 20,000 12,000 183,200 Accrued liabilities 72,000 Dividends payable Bonds payable Share capital-Preference ($50 128,000 832,000 60,000 par) Share capital-ordinary ($10 par) Share premium-ordinary Retained earning 379,200 223,200 77,200 Additional information: 1. Net income for 2016 $150,000 2. Cash dividends of $128,000 were declared December 15, 2016, payable January 15, 2017. A 5% share dividend was issued March 31, 2016, when the fair value was $22.00 per share. 3. The long-term investments were sold for $140,000. 4. A building and land which cost $480,000 and had a book value of $300,000 were sold for $400,000. The cost of the land, included in the cost and book value above, was $20,000. 5. The company exchanged an old machine which has a cost of $60,000 and an accumulated depreciation of $40,000 with a new machine with a fair value of $160,000. The company paid $140,000 cash in relation to the exchange. 6. A fully depreciated printing machine which cost $28,000 was written off. 7. Preference shares of $60,000 par value were called for $80,000. 8. The company sold 12,000 shares of its ordinary share (no par) during 2016 for $25 a share. There were 87,600 shares outstanding on December 31, 2016. 9. Bonds were sold at 104 on December 31, 2016. 10. Land was sold for $108,000. It had a book value of $240,000 Required: For Solar Services Inc.: Prepare the Cash Flow Statement for 2016 in the correct format using the indirect method
The net changes in the statement of financial position accounts of Solar Services, Inc. for the year 2016 are shown below: Account Debit Credit Cash $ 125,600 Accounts receivable 64,000 Allowance for doubtful 14,000 accounts Inventory 217,200 Prepaid expenses 30,000 Long-term investments Land 144,000 300,000 Buildings 600,000 Machinery Office equipment Accumulated depreciation: 100,000 28,000 Buildings 24,000 Machinery Office equipment Accounts payable 20,000 12,000 183,200 Accrued liabilities 72,000 Dividends payable Bonds payable Share capital-Preference ($50 128,000 832,000 60,000 par) Share capital-ordinary ($10 par) Share premium-ordinary Retained earning 379,200 223,200 77,200 Additional information: 1. Net income for 2016 $150,000 2. Cash dividends of $128,000 were declared December 15, 2016, payable January 15, 2017. A 5% share dividend was issued March 31, 2016, when the fair value was $22.00 per share. 3. The long-term investments were sold for $140,000. 4. A building and land which cost $480,000 and had a book value of $300,000 were sold for $400,000. The cost of the land, included in the cost and book value above, was $20,000. 5. The company exchanged an old machine which has a cost of $60,000 and an accumulated depreciation of $40,000 with a new machine with a fair value of $160,000. The company paid $140,000 cash in relation to the exchange. 6. A fully depreciated printing machine which cost $28,000 was written off. 7. Preference shares of $60,000 par value were called for $80,000. 8. The company sold 12,000 shares of its ordinary share (no par) during 2016 for $25 a share. There were 87,600 shares outstanding on December 31, 2016. 9. Bonds were sold at 104 on December 31, 2016. 10. Land was sold for $108,000. It had a book value of $240,000 Required: For Solar Services Inc.: Prepare the Cash Flow Statement for 2016 in the correct format using the indirect method
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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Transcribed Image Text:The net changes in the statement of financial position accounts of Solar Services, Inc. for the year 2016
are shown below:
Account
Debit
Credit
Cash
$ 125,600
Accounts receivable
$
64,000
Allowance for doubtful
14,000
accounts
Inventory
217,200
Prepaid expenses
30,000
Long-term investments
144,000
Land
300,000
Buildings
600,000
Machinery
Office equipment
100,000
28,000
Accumulated depreciation:
Buildings
24,000
Machinery
20,000
Office equipment
12,000
Accounts payable
183,200
Accrued liabilities
72,000
Dividends payable
128,000
Bonds payable
832,000
Share capital-Preference ($50
60,000
par)
Share capital-ordinary ($10 par)
Share premium-ordinary
379,200
223,200
Retained earning
77,200
Additional information:
1. Net income for 2016 $150,000
2. Cash dividends of $128,000 were declared December 15, 2016, payable January 15, 2017. A 5% share
dividend was issued March 31, 2016, when the fair value was $22.00 per share.
3. The long-term investments were sold for $140,000.
4. A building and land which cost $480,000 and had a book value of $300,000 were sold for $400,000.
The cost of the land, included in the cost and book value above, was $20,000.
5. The company exchanged an old machine which has a cost of $60,000 and an accumulated
depreciation of $40,000 with a new machine with a fair value of $160,000. The company paid $140,000
cash in relation to the exchange.
6. A fully depreciated printing machine which cost $28,000 was written off.
7. Preference shares of $60,000 par value were called for $80,000.
8. The company sold 12,000 shares of its ordinary share (no par) during 2016 for $25 a share. There
were 87,600 shares outstanding on December 31, 2016.
9. Bonds were sold at 104 on December 31, 2016.
10. Land was sold for $108,000. It had a book value of $240,000
Required:
For Solar Services Inc.: Prepare the Cash Flow Statement for 2016 in the correct format using the indirect method
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