a catering company reported the following additional financial statements and inform 594004
A catering company reported the following additional financial statements and information for two successive years:
Additional financial information:
1. In Year 2005, the building that was previously rented was purchased for $150,000. The company paid $10,000 cash and assumed a long term mortgage for $140,000. Depreciation on the building is $7,500 for Year 2005. At the end of year 2005, $7,100 of the mortgage payable was reclassified as a current liability payable in Year 2006.
2. New stock was issued for cash, 200 shares at $50.00 each.
|
Statement of Retained Earnings For the Year Ended December 31, 2005 |
|
|
Retained earnings December 31, 2004 |
$29,900 |
|
Operating loss for Year 2005 |
(81,00) |
|
Retained earnings December 31, 2005 |
$21800 |
The equipment account, and its accumulated depreciation account, is shown below:
|
Equipment |
Accum. Depr. |
|
|
Balance December 31, 2004 |
$31,700 |
$5,800 |
|
Purchased new equipment |
6,300 |
|
|
Disposed of fully depreciated old equipment |
(41,00) |
(41,00) |
|
Depreciation expense year 2005 |
4500 |
|
|
Balance December 31, 2005 |
33900 |
$6200 |
|
Comparative Balance Sheet |
||
|
12-31-2004 |
12-31-2005 |
|
|
Current Assets |
||
|
Cash |
$ 8,600 |
$ 15,000 |
|
Accounts receivable |
19,800 |
15,800 |
|
Inventory, food |
6,100 |
6,300 |
|
Prepaid expenses |
1200 |
1700 |
|
Total Current Assets |
$35,700 |
$35,800 |
|
Noncurrent, Fixed Assets |
||
|
Building |
-0- |
150,000 |
|
Accumulated depreciation, building |
-0- |
(7500) |
|
Equipment |
31,700 |
33900 |
|
Accumulated depreciation, equipment |
(5800) |
(6200) |
|
Total Non-current, Fixed Assets |
$25,900 |
$170,200 |
|
Total Assets |
$61,600 |
$209,000 |
|
Liabilities and Stockholders’ Equity |
||
|
Current Liabilities |
||
|
Accounts payable |
$21,200 |
$ 25,400 |
|
Accrued expenses |
7,500 |
8,800 |
|
Current portion of mortgage payable |
-0- |
7,100 |
|
Total Current Liabilities |
$28,700 |
$41300 |
|
Long-Term Liabilities |
||
|
Long-term mortgage payable |
-0- |
$132,900 |
|
Stockholders’ Equity |
||
|
Common stock |
$ 3,000 |
$13,000 |
|
Retained earnings |
29,900 |
21,800 |
|
Total Stockholders’ Equity |
$32,900 |
$34,800 |
|
Total Liabilities and Stockholders’ Equity |
$61,600 |
$209,000 |
Calculate the changes in working capital and prepare the company’s statement of sources (inflows) and uses (outflows) for the year ended December 31, 2005.