Question

Following is Crash Zone Corporation’s balance sheet at the end of 2013 and its cash flow statement for 2014. Crash zone manufactures safety equipment for race cars.
Balance Sheet as of December 31, 2013
Assets
Current assets
Cash ........................ $ 8,250
Accounts receivable—net ................. 7,110
Inventory ...................... 14,221
Prepaid assets ...................... 1,850
Total current assets ................... 31,431
Land ........................ 30,278
Building and equipment ................ 222,665
Less: Accumulated depreciation, building and equipment .... (41,115)
Total assets ...................... $243,259
Liabilities and Stockholders’ Equity
Current liabilities
Accounts payable .................. $ 13,500
Accrued expenses ................... 4,888
Total current liabilities .................. 18,388
Long-term debt .................... 31,500
Stockholders’ equity
Common stock, $10.00 par value ............. 21,552
Paid-in capital ..................... 45,002
Retained earnings .................. 146,872
Less: Treasury stock .................. (20,005)
Total liabilities and stockholders’ equity ........ $243,259

Statement of Cash Flows for Year Ended December 31, 2014
Operating activities
Net income ................... $ 15,750
Plus (minus) noncash items
+Depreciation expense ................. 6,210
Plus (minus) changes in current asset and liability accounts
-Increase in inventory ................ (350)
1Decrease in prepaid assets ............... 102
2Decrease in accrued expenses ............. (655)
2Increase in accounts receivable ........... (3,178)
2Decrease in accounts payable ............ (1,230)
Cash provided by operating activities .......... 16,649
Investing activities
Purchase of equipment ............... (27,910)
Proceeds from the sale of land ............. 6,555
Cash used by investing activities ........... $(21,355)
Financing activities
Issuance of long-term debt ................ 8,900
Issuance of common stock .............. 23,000
Cash dividends paid ................. (12,200)
Purchase of treasury stock ............... (7,513)
Cash provided by financing activities ............ 12,187
Net cash flow .................... $ 7,481

Additional Information:
a. During 2014, 500 shares of common stock were sold to the public.
b. Land was sold during 2014 at an amount equal to its original cost.

Required:
Use the preceding information to derive Crash Zone’s balance sheet at the end of 2014.



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  • CreatedSeptember 10, 2014
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