The following information (account balances) were taken from Sampson Company's accounting records at January 1, 2018 and December 31, 2018: Account Titles 01/01/18 12/31/18 Debits...

Question

The following information (account balances) were taken from Sampson Company's accounting records at January 1, 2018 and December 31, 2018:


Account Titles	01/01/18	12/31/18
*Debits*
Cash	$ 1,400	$ 2,400
Accounts Receivable (net)	2,800	2,690
Marketable Securities (at cost)	1,700	3,000
Allowance for Change in Value	500	800
Inventories	8,100	7,910
Prepaid Items	1,300	1,710
Investments (long-term)	7,000	5,400
Land	15,000	15,000
Buildings and Equipment	32,000	46,200
Discount on Bonds Payable	—	290
	$69,800	$85,400
*Credits*
Accumulated Depreciation	$16,000	$16,400
Accounts Payable	3,800	4,150
Income Taxes Payable	2,400	2,504
Wages Payable	1,100	650
Interest Payable	—	400
Note Payable (long-term)	3,500	—
12% Bonds Payable	—	10,000
Deferred Taxes Payable	800	1,196
Convertible Preferred Stock, $100 par	9,000	—
Common Stock, $10 par	14,000	21,500
Additional Paid-in Capital	8,700	13,700
Unrealized Increase in Value of Marketable Securities	500	800
Retained Earnings	10,000	14,100
	$69,800	$85,400

Additional information for the year ending December 31, 2018:

Sales		$ 39,930
Cost of goods sold		(19,890)
Depreciation expense		(2,100)
Wages expense		(11,000)
Other operating expenses		(1,000)
Bond interest expense		(410)
Dividend revenue		820
Gain on sale of investments		700
Loss on sale of equipment		(200)
Income tax expense		(2,050)
Net income		$ 4,800

Dividends declared and paid totaled $700 on December 1, 2018.
On January 1, 2018, convertible preferred stock that had originally been issued at par value were converted into 500 shares of common stock. The book value method was used to account for the conversion.
Long-term nonmarketable investments that cost $1,600 were sold for $2,300.
The long-term note payable was paid by issuing 250 shares of common stock at the beginning of the year.
Equipment with a cost of $2,000 and a book value of $300 was sold for $100. The company uses one Accumulated Depreciation account for all depreciable assets.
Equipment was purchased at a cost of $16,200.
The 12% bonds payable were issued on August 31, 2018, at 97. They mature on August 31, 2028. The company uses the straight-line method to amortize the discount.
Taxable income was less than pretax accounting income, resulting in a $396 increase in deferred taxes payable.
Short-term marketable securities were purchased at a cost of $1,300. The portfolio was increased by $300 to a $3,800 fair value at year-end by adjusting the related allowance account.

Required

Prepare the statement of cash flows using the proper format

 · Answer

Answer :-    L Company   Cash flow statement   For the year ended December 31,2018   Particulars Amount Amount   Operating Activities :-          Net Income $4,800         Adjustments for non-cash income items :-     Depreciation $2,100    Loss on sale of equipment $200    Gain on sale of investments ($700)    Bond discount amortization $10    Increase in deferred taxes payable $396         Adjustments for cash flow effects from working capital items :-     Decrease in accounts receivable $110    Increase in inventories $190    Increase in prepaid items ($410)    Increase in accounts payable $350    Increase in income taxes payable $104    Decrease in wages payable ($450)    Increase in interest payable $400         Cash generated from operating activities  $7,100        Investing activities :-     Payment for purchase of short-term marketable securities ($1,300)    Proceeds from sale of long-term investments $2,300    Proceeds from sale of equipment $100    Payment for purchase of equipment ($16,200)    Cash generated from investing activities  ($15,100)        Financing activities :-     Proceeds from insurance of $9,700    Payment of dividends ($700)    Cash flow from financing activities  $9,000        Net cash generated  $1,000   Add: Opening cash balance  $1,400   Closing cash balance :-  $2,400   .

The following information (account balances) were taken from Sampson Company's accounting records at January 1, 2018 and December 31, 2018:

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L Company
Cash flow statement
For the year ended December 31,2018
Particulars	Amount	Amount
Operating Activities :-

Net Income	$4,800

Adjustments for non-cash income items :-
Depreciation	$2,100
Loss on sale of equipment	$200
Gain on sale of investments	($700)
Bond discount amortization	$10
Increase in deferred taxes payable	$396

Adjustments for cash flow effects from working capital items :-
Decrease in accounts receivable	$110
Increase in inventories	$190
Increase in prepaid items	($410)
Increase in accounts payable	$350
Increase in income taxes payable	$104
Decrease in wages payable	($450)
Increase in interest payable	$400

Cash generated from operating activities		$7,100

Investing activities :-
Payment for purchase of short-term marketable securities	($1,300)
Proceeds from sale of long-term investments	$2,300
Proceeds from sale of equipment	$100
Payment for purchase of equipment	($16,200)
Cash generated from investing activities		($15,100)

Financing activities :-
Proceeds from insurance of	$9,700
Payment of dividends	($700)
Cash flow from financing activities		$9,000

Net cash generated		$1,000
Add: Opening cash balance		$1,400
Closing cash balance :-		$2,400