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I-16.02 Problem - note payable No buildings were purchased...

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I-16.02 Travis Engineering presented the following comparative balance sheet: TRAVIS ENGINEERING Balance Sheet December 31, 20X2 and 20X3 20X3 20X2 Assets Cash 672,200 $ 145,300 $ Accounts receivable 219,600 175,600 Inventories 234,500 316,900 Land 1,300,000 300,000 Building and equipment 900,000 856,000 Less: Accumulated depreciation (501,800) (435,000) Total assets 2,824,500 $ 1,358,800 $ Liabilities Accounts payable 111,100 $ 93,400 $ Utilities payable 2,500 4,000 Interest payable 5,000 - Long-term note payable 1,000,000 - Stockholders' equity Common stock, $1 par 300,000 250,000 Paid in capital in excess of par 560,000 450,000 Retained earnings 845,900 561,400 Total liabilities and equity 2,824,500 $ 1,358,800 $ Additional information about transactions and events occurring in 20X3 is as follows: Dividends of $105,700 were declared and paid. Accounts payable and accounts receivable relate solely to purchases and sales of inventory. The increase in land resulted from the purchase of land via issuance of the long-term
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Unformatted text preview: note payable. No buildings were purchased or sold. Equipment was purchased. In January of 20X3, equipment with an original cost of $75,000 was sold for $50,000. The increase in paid-in capital all resulted from issuing additional shares for cash. 1 of 2 I-16.02 The income statement for the year ending 20X3 follows: TRAVIS ENGINEERING Income Statement For the Year Ending December 31, 20X3 Sales 2,856,000 $ Cost of goods sold 1,576,300 Gross profit 1,279,700 $ Operating expenses and other Salaries 433,500 $ Utilities 64,200 Interest 60,000 Depreciation 76,800 Loss on sale of equipment 15,000 649,500 Income before income tax 630,200 Income tax 240,000 Net income 390,200 $ Prepare Travis Engineering's statement of cash flows for the year ending 20X3. Use the direct approach, and prepare the supplement reconciliation of net income to operating cash flows. 2 of 2...
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