27) Mr. Wizard’s Magic Shoppe had the following condensed balance sheet at the end of operation for 2010:
Mr. Wizard’s Magic Shoppe
Balance Sheet
December 31, 2010
|
Cash |
$40,000 |
Current Liabilities |
$35,000 |
|
|
Other current assets |
60,000 |
Long-term Notes Payable |
40,000 |
|
|
Total current assets |
$100,000 |
Bonds Payable |
50,000 |
|
|
Investments |
$25,000 |
Capital Stock |
150,000 |
|
|
Fixed assets (net) |
110,000 |
Retained earnings |
80,000 |
|
|
Land |
$120,000 |
|||
|
Total assets |
$355,000 |
Total Liabilities and Equity |
$355,000 |
During 2011, the following occurred
a. Mr. Wizard’s sold some of its investments for $13,000 which resulted in a gain of $300 after taxes. The gain (net of taxes) has been included in the company’s 2011 net income.
b. Additional land for a plant expansion was purchased for $25,000.
c. Bonds payable were paid in the amount of $10,000.
d. An additional $35,000 in capital stock was issued.
e. Dividends of $15,000 were paid to stockholders.
f. Net income for 2011 was $48,000 after allowing for $15,000 in depreciation.
g. A second parcel of land was purchased through the issuance of $10,000 in bonds, and $5,000 in long-term notes payable.
Required:
a. Prepare a statement of cash flows for the year ended 12/31/2011. (check figure: ending cash balance = $72,500)
b. Prepare a condensed balance sheet for Mr. Wizard’s at December 31, 2011.
28) Given the information below, calculate the company’s cash balance at the end of the year.
|
Cash Balance at Beginning of Year |
$80,000 |
|
Activity During the Year |
|
|
Increase in Accounts Payable |
$60,000 |
|
Decrease in Accounts Receivable |
$40,000 |
|
Depreciation Expense |
$500,000 |
|
Net Income |
$2,000,000 |
|
Purchase of Fixed Assets |
$800,000 |
|
Sales of Common Stock |
$100,000 |
|
Decrease in Notes Payable |
$85,000 |
|
Dividends Paid |
$15,000 |
