Business, 25.02.2020 17:51 amberpetty4288
Presented below are the balance sheet accounts of Kern, Inc. as of December 31, year 4 and year 3 and their net changes.
Assets
Year 4
Year 3
Net change
Cash
$ 471,000
$ 307,000
$ 164,000
Marketable equity securities, at cost
150,000
250,000
(100,000)
Allowance to reduce marketable equity securities to market
(10,000)
(25,000)
15,000
Accounts receivable, net
550,000
515,000
35,000
Inventories
810,000
890,000
(80,000)
Investment in Word Corp., at equity
420,000
390,000
30,000
Property, plant, and equipment
1,145,000
1,070,000
75,000
Accumulated depreciation
(345,000)
(280,000)
(65,000)
Patent, net
109,000
118,000
(9,000)
Total assets
$3,300,000
$3,235,000
$ 65,000
Liabilities and Stockholders' Equity
A/P and accrued liabilities
$ 845,000
$ 960,000
$(115,000)
Note payable, long term
600,000
900,000
(300,000)
Deferred tax liability
190,000
190,000
--
Common stock, $10 par value
850,000
650,000
200,000
Additional paid-in capital
230,000
170,000
60,000
Retained earnings
585,000
365,000
220,000
Total liabilities and
stockholders' equity
$3,300,000
$3,235,000
$ 65,000
Additional Information:
On January 2, year 4, Kern sold equipment costing $45,000, with a carrying amount of $28,000, for $18,000 cash.
On March 31, year 4, Kern sold one of its marketable equity security holdings for $119,000 cash.
There were no other transactions involving marketable equity securities.
On April 15, year 4, Kern issued 20,000 shares of its common stock for cash at $13 per share.
On July 1, year 4, Kern purchased equipment for $120,000 cash.
Kern's net income for year 4 is $305,000. Kern paid a cash dividend of $85,000 on October 26, year 4.
Kern acquired a 20% interest in Word Corp.'s common stock during year 1. There was no goodwill attributable to the investment which is appropriately accounted for by the equity method. Word reported net income of $150,000 for the year ended December 31, year 4. No dividend was paid on Word's common stock during year 4.
Prepare a statement of cash flows for Kern, Inc. for the year ended December 31, year 4 using the indirect method. Enter deductions/uses as a negative number. Round all amounts to the nearest whole number.
Item
Amount
Amount
Cash flows from operating activities:
Net income
[1]
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation
[2]
Amortization of patent
[3]
Loss on sale of equipment
[4]
Equity in income of Word Corp.
[5]
Gain on sale of marketable equity securities
[6]
Decrease in allowance to reduce marketable equity securities to market
[7]
Increase in accounts receivable
[8]
Decrease in inventories
[9]
Decrease in accounts payable and accrued liabilities
[10___]
Net cash provided by operating activities
[11___]
Cash flows from investing activities:
Sale of marketable equity securities
[12___]
Sale of equipment
[13___]
Purchase of equipment
[14___]
Net cash provided by investing activities
[15___]
Cash flows from financing activities:
Issuance of common stock
[16___]
Cash dividend paid
[17___]
Payment on note payable
[18___]
Net cash used in financing activities
[19___]
Net increase in cash
[20___]
Cash at beginning of year
307,000
Cash at end of year
[21___]
Note: Please enter your responses below. Find a way to make them correspond with the number within the table and separate them with semicolons. Use the following examples for [1], [2], and [3] as a reference for formulating your responses:
Example A: (1)555,000; (2)90,555; (3)1,234;
Example B: 1--555,000; 2--90,555; 3--1,234;
Example C: 1 = 555,000; 2 = 90,555; 3 = 1,234;
Be sure that your answers are clear with whichever method you choose.
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Presented below are the balance sheet accounts of Kern, Inc. as of December 31, year 4 and year 3 an...
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