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Posts: 130
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9 months ago
Manila Corporation's comparative balance sheet appears below: | Comparative Balance Sheet | | Ending Balance | Beginning Balance |
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| Assets: | | |
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| Current assets: | | |
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| Cash and cash equivalents | $ 42,000 | $ 26,000 |
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| Accounts receivable* | 22,000 | 26,000 |
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| Inventory* | 77,000 | 75,000 |
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| Total current assets | 141,000 | 127,000 |
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| Property, plant, and equipment* | 340,000 | 315,000 |
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| Less accumulated depreciation* | 218,000 | 187,000 |
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| Net property, plant, and equipment | 122,000 | 128,000 |
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| Total assets | $ 263,000 | $ 255,000 |
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| Liabilities and stockholders' equity: | | |
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| Current liabilities: | | |
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| Accounts payable* | $ 13,000 | $ 14,000 |
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| Accrued liabilities* | 32,000 | 33,000 |
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| Income taxes payable* | 63,000 | 54,000 |
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| Total current liabilities | 108,000 | 101,000 |
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| Bonds payable* | 93,000 | 94,000 |
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| Total liabilities | 201,000 | 195,000 |
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| Stockholders’ equity: | | |
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| Common stock* | 28,000 | 24,000 |
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| Retained earnings | 34,000 | 36,000 |
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| Total stockholders’ equity | 62,000 | 60,000 |
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| Total liabilities and stockholders' equity | $ 263,000 | $ 255,000 |
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The company's net income (loss) for the year was $0 and its cash dividends were $2,000. It did not dispose of any property, plant, and equipment, issue any bonds payable, or repurchase any of its own common stock during the year. Required: Compute the change in each balance sheet account denoted with an asterisk (*). Indicate whether the change in each balance will be recorded in the operating, investing, or financing activities section of the statement of cash flows. For items recorded in the operating activities section, also indicate whether the change will be added to or subtracted from net income. For all other items, indicate whether the change will be added as a cash inflow or subtracted as a cash outflow. The first entry has been filled in as an example. | Ending Balance | Beginning Balance | Change | Section | Add or Subtract |
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| Accounts receivable | 22,000 | 26,000 | −4,000 | Operating | Add |
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| Inventory | 77,000 | 75,000 | | | |
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| Property, plant, and equipment | 340,000 | 315,000 | | | |
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| Accumulated depreciation | 218,000 | 187,000 | | | |
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| Accounts payable | 13,000 | 14,000 | | | |
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| Accrued liabilities | 32,000 | 33,000 | | | |
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| Income taxes payable | 63,000 | 54,000 | | | |
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| Bonds payable | 93,000 | 94,000 | | | |
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| Common stock | 28,000 | 24,000 | | | |
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