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The comparative balance sheets for Hinckley Corporation show the following information.
December 31
Cash
Accounts receivable
Inventory
Investments
Buildings
Equipment
Patents
2014
$35,560
18,670
15,510
0
0
50,250
5,830
$125,820
2013
$14,980
11,860
9,600
3,530
30,120
22,940
6,490
$99,520
$3,150
$5,040
2,400
4,800
0
5,830
0
2,680
31,190
43,810
36,760
$125,820
6,090
3,530
4,190
3,940
25,650
33,650
12,630
$99,520
2.
3.
4.
5.
6.
7.
8.
Net Income
24,130
Depreciation Expense
Patent Amortization
Increase in Inventory
4,244
-12,350
2,476
660
-1,580
-8,700
-5,910
2,300
-18,860
Net Cash Provided by Operating Activities
5,270
Sale of Investments
Sale of Equipment
Purchase of Equipment
5,110
3,070
-23,800
36,380
20,760
Payment of Dividends
-4,190
-1,260
-5,450
20,580
14,980
35,560
3,430
8,030
10,160
15,700
25,860
Problem 23-2
Gain from flood damage
= ($32,450 + $3,930) ($30,120 $6,090) = $(12,350)
Increase in accounts receivable (net) = ($18,670 $3,150) ($11,860 $5,040) = $(8,700)
(a) Ending retained earnings
Beginning retained earnings
Net income
$36,760
(12,630)
$24,130
(b) Cost
Accumulated depreciation (40% x $12,190)
Book value
Proceeds from sale
Loss on sale
$12,190
(4,876)
$7,314
(3,070)
$4,244
$4,876
(2,400)
$2,476
$22,940
(12,190)
10,750
15,700
26,450
(50,250)
$23,800